Bidvest abandons Brake Brothers bid

The path was cleared for Brake Brothers, the UK's biggest frozen food supplier, to be taken over by a US private equity group after the Government ruled yesterday that an approach by a rival bidder would damage competition.

Bidvest, the South African group that owns the British foodservice provider 3663, said it had decided to abandon "any form of combination" with the UK company in light of the recommended £434m cash offer made by Clayton Dubilier & Rice of the US for Brake Bros earlier this week.

Bidvest's move followed an announcement by the Competition minister, Melanie Johnson, that any deal with Brake Bros would be referred to the Competition Commission because it raised "competition concerns in the market for national wholesale foodservice delivery in Great Britain". Ms Johnson, acting on advice from the Office of Fair Trading, said "the proposed merger would combine [Britain's] two largest companies in food delivery/wholesaling, creating what would probably be the only real national provider and the only provider covering all temperature ranges".

Brian Joffe, Bidvest's chairman, said he was "disappointed" but 3663 was "well-placed to pursue alternative growth opportunities". Frank Brake, Brake Bros's founding chairman, put the company up for sale in March. The 825p-a-share offer from CDRP Acquisition, a division of the US private equity group, will net Mr Brake and his family £256m.