Premier Foods bread unit attracts three investors but full sale unlikely
Three bidders remain for Premier Foods’ bread business, according to City sources cited in a report on The Grocer website. The sources said the private equity houses PAI Partners, Sun Capital and Gores Group are still vying to invest in the bread operation, which includes the Hovis brand.
Premier had originally hoped to find an investor to acquire the bread business, but the sale process failed, the item reported. It said some prospective bidders had been deterred by the uncertain future of the business, as well as the investment necessary to make requisite improvements. Grupo Bimbo is believed to have been among interested parties that were deterred by the level of investment required for modernisation of Premier’s bakeries, the item reported.
Premier is now looking at ways it can improve the bread unit’s profitability, including changing over to a spoke-and-hub model of distribution, the report said. It added that Ondra Partners has been tasked with seeking a buyer for a stake which would give the bread unit a valuation around the GBP 150m (EUR 180m) mark. The operation could end up separated from Premier into a standalone entity or a joint venture, the report said.
Source The Grocer