Crisp-maker who defied Tesco opens negotiations to sell company for £40m

Will Chase, the potato farmer who humbled Tesco by refusing the grocery chain the right to sell his fashionable hand-fried crisps, is about to sell off his business in a deal that will make him a multimillionaire.

Mr Chase, who speaks in a broad Herefordshire accent, has been meeting private equity executives in London with a view to selling off a sizeable chunk, and perhaps all, of Tyrrells Potato Chips, which have become the snack of choice in gastropubs and delicatessens across Britain. A price of £40m has been agreed, according to one source in the negotiations.

Realising such a price would be a huge coup for Mr Chase, who founded Tyrrells in 2002 when he found he could no longer make enough money from the potatoes he grew on the family farm.

The sale could also enable Tyrrells, which is based at Stretford Bridge, near Leominster, to compete with the leading crisp brands, such as the market leader Walkers, which is owned by the US food giant PepsiCo.

Tyrrells' managers areunderstood to have been in lengthy talks with the private equity firm Langholm Capital about the sale of a substantial stake in the company. The £40m price tag is said to have been agreed in principle, though negotiations are not expected to be concluded for several weeks.

For so long a commercial underdog, Mr Chase has appeared to be keen this year to sell part – or all – of his equity in the firm.

At present the snack-maker – whose 10 main flavours range from sea salt to spicy jalapeno chilli – markets itself as an independent brand and counts Harrods, Fortnum & Mason and Selfridges among its 6,000 independent retailers. It also supplies Waitrose on account of its reputation of dealing fairly with small businesses, something which was important to Mr Chase because of the struggle he had had selling potatoes before Tyrrells took off.

Mr Chase bought his father's farm, Tyrrells Court, in 1984 with a loan of £200,000 but the business went bust eight years later and Mr Chase left his young family to live in Australia. He returned three months later and started to rebuild his career, agreeing to sell potatoes to Tesco, which at the time was short of local suppliers.

Within a few years, competition intensified and prices fell. As a result, he diversified into crisps, impressing customers with his understated marketing and unusual flavours.

Tyrrells established itself as a distinct English brand and Mr Chase politely declined Tesco's offer to sell his product. He was subsequently infuriated when the chain bought a batch from a wholesaler two years ago and sold the crisps anyway. "It was a bit of a shock for us one day for somebody to tell us that we were actually in Tesco," he recalled.

After a public spat, Tesco announced it would no longer stock the crisps, though Mr Chase said he might want to sell to the chain one day when Tyrrells was bigger.

He has also been building a distillery so that he can turn his potatoes that are too small for crisps into vodka, with the help of a £5m interest-free loan from the Bank of Scotland.

After receiving unsolicited bid approaches Mr Chase appointed corporate financiers BDO Stoy Hayward to carry out a strategic review of the company.

"As Tyrrells grows, so I can enjoy life," Mr Chase said in an interview earlier this month. I would like to be more of a serial entrepreneur. I would love the challenge of seeing if I could do it again."