Barilla plans GBP 1.5bn move on Weetabix - reports
A takeover bid for Weetabix, the UK-based breakfast cereal company, is being prepared by the family run Italian pasta group Barilla, The Sunday Times reported. The report cited people close to Bright Food, the Chinese owner of Weetabix, who said the group’s plan to grow the brand in China has not been overly successful.
A number of credible suitors are believed to be circling Weetabix, which also counts Ready Brek, Weetos and Alpen among its brands, the item reported. Should cereal titans such as US-based Kellogg’s [NYSE:K] join the process and stoke up a bid war, analysts estimate Weetabix might fetch up to GBP 2bn (USD 2.5bn), the report said. However, The Sunday Telegraph cited bankers who believe Kellogg’s would not take part as it would run into competition issues.
Barilla is believed to be preparing a bid of GBP 1.5bn and is currently discussing the matter with London-based advisers, the Times reported. City sources cited in the Telegraph report were sceptical however that bidders would meet Bright Foods’ GBP 1.5bn asking price, based on Weetabix's current turnover and profits, which have dropped over the past three years.
Goldman Sachs has been engaged to sell Weetabix and has been told a trade buyer is preferable to a buyer from the private-equity sector, the item reported.
Baring Private Equity Asia, which acquired a minority interest in Weetabix just over a year ago, is thought likely to dispose of its stake during the upcoming sale process, the item reported.
The Sunday Telegraph reported that Cereal Partners Worldwide, a joint venture between General Mills [NYSE:GIS] and Nestle [VTX: NESN], has indicated it is interested in bidding for Weetabix. Drinks giant PepsiCo [NYSE:PEP] and Turkey-based food group Pladis are also believed to be involved, the report said.
The original report appeared in The Sunday Times, Business section, page 1; and The Sunday Telegraph, Business & Money section, page 1