UB shares rise on bid speculation
Friday 26 November 1999
It is understood that Danone, the world's biggest biscuit and dairy products maker, has teamed up with Paribas Affaires Industrielles, the French financial group which sold its Maille Amora condiments interest to Unilever, to launch a joint bid for UB. The two groups have reportedly offered about 260p a share, or pounds 1.2bn for UB's biscuits and snacks units, although analysts value the business at closer to 275p a share.
Nicola Mallard, an analyst at CCF Charterhouse, welcomed the entrance of a weighty trade buyer into the negotiations to buy UB. She described the prospect of a Danone bid as "logical" and said the potential synergy benefits could push up the price the French company was able to offer, making it the leading contender in the race to snap up the ailing British food group.
Danone's main challengers are Hicks, Muse Tate and Furst, the US private equity firm which this year bought another UK food company, Hillsdown Holdings, and Nabisco, the US snacks group which is backed by CVC Capital Partners.
Analysts said a deal between Danone and UB could run into competition problems. Danone already has a 6 per cent share of the UK market through its Jacobs biscuits division, while UB has a similar slice of the French market.
UB shares yesterday closed up 7.5p at 235.75p.
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