Bidding war for United Biscuits starts as rivals declare interest

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The Independent Online

The first round of bidding for United Biscuits, the UK-based KP nuts and McVities biscuits maker, began in earnest yesterday as the two would-be buyers publicly declared their interests in the company.

The first round of bidding for United Biscuits, the UK-based KP nuts and McVities biscuits maker, began in earnest yesterday as the two would-be buyers publicly declared their interests in the company.

The first move was made by a consortium comprising Hicks, Muse, Tate & Furst, the private investment firm, and Nabisco, the US-based food giant. The two groups teamed up to offer £1.16bn, or 245p a share in cash, through a newly-formed vehicle, Burlington Biscuits, in a deal that has been recommended by UB's independent directors.

An hour after the Hicks-Nabisco bid was announced, a French-led consortium, including Paribas Affaires Industrielles, the private equity arm of BNP-Paribas, and Danone, the snacks and yoghurt maker, confirmed its intention to enter a bidding war. A spokesman for the group, known as Finalrealm, said: "We would be looking to create some daylight between our offer and the one on the table."

A counter offer is expected to be announced today and analysts say the most likely level for the bid is about 160p a share. UB shares closed up 19.5p at 254.5p.

Finalrealm is thought to have been surprised that Burlington's bid was agreed, believing that its own offer, thought to be worth about 242.5p a share, would be recommended by the UB board.

If the Burlington deal goes ahead, Hicks Muse will sell its European biscuit brands to the enlarged company for £80m and will take control of three quarters of Burlington. Nabisco will get a 23 per cent stake in the venture in exchange for its Spanish and Portuguese businesses. Burlington intends to retain UB's management team.

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