United Biscuits nears break-up of brands
UNITED Biscuits, which makes tea-time favourites including Digestives and Jaffa Cakes, could be broken up as its owners plan to renew efforts to sell the company.
Private Equity owners Blackstone and PAI Capital will hold fresh talks in coming months that may see the savoury brands, which include KP Peanuts, spun off from its biscuits division.
The two firms bought United Biscuits, Britain’s largest biscuit producer, in 2006 for £1.6bn.
Last summer, they hired JP Morgan and Goldman Sachs to conduct a strategic review of the business, with a view to selling it for more than £2bn, but they have failed to deliver a deal, despite big food multinationals, such as China’s Bright Foods Kraft and Campbell Soup Company, being linked as potential purchasers.
A new attempt to sell the firm would see Britain’s largest biscuit producer split into two, in a move that echoes Kraft’s announcement last week to divide itself into two listed companies.
In accounts published last months, United Biscuits UK saw its operating profits jump by 10.4 per cent to £218.5m last year, showing that Britons’ hunger for biscuits held up despite a tough year for cash-strapped UK consumers.
The accounts also showed that the UK suffered most from a drive to cut costs across the company, with a headcount crumbling by five per cent to 6,169.
Campbell Soup Company is expected to renew its interest in UB’s biscuit arm, which accounts for 26 per cent of the UK’s biscuit market.
PAI Partners declined to comment while City A.M was unable to reach Blackstone for comment.