Potential rival told to make bid or walk

A POTENTIAL rival bidder for Leeds-based Northern Foods has been told to come up with an offer by January 21.

Boparan Holdings Limited, which already owns 6.6 per cent of the company, voiced interest in a takeover last month.

Businessman Ranjit Boparan's potential merger could throw a proposed tie-up between Northern Foods and Greencore Group plc into chaos.

The board of Northern Foods and Greencore are asking shareholders to back their merger at a meeting on January 31. The merger would form Essenta Foods.

Mr Boparan, who owns Harry Ramsden, has said there is no certainty he will make a bid but has requested information about Northern Foods in line with the City Code on Takeovers and Mergers.

Now the Takeover Panel, an independent body which watches over takeovers and mergers, has told Mr Boparan to make a bid by January 21.

In a statement it said that Boparan Holdings Limited must clarify the situation by "announcing either a firm intention to make an offer for Northern Foods...or announcing that it does not intend to make an offer for Northern Foods."

Northern Foods has welcomed the move by the Takeover Panel, whose full title is The Panel on Takeovers and Mergers.

Northern Foods said in a statement: "The board of Northern Foods plc...welcomes (the] announcement by The Panel on Takeovers and Mergers that Boparan Holdings Limited must either announce a firm intention to make an offer for Northern Foods (where the announcement would also include the terms of the offer) or announce that it does not intend to make an offer for Northern Foods by 21 January 2011, in advance of the Northern Foods shareholder meetings on 31 January 2011.

"To date Boparan has not made an offer proposal to the board of Northern Foods and there is no certainty that any offer will be made or of the terms of any such offer.

"The board continues unanimously to recommend shareholders vote in favour of the proposed merger (with Greencore] at the shareholder meetings on 31 January 2011.

The board continues to believe that the proposed merger with Greencore Group plc to form Essenta Foods offers substantial benefits for its shareholders, customers and employees and will create a convenience foods business with a strong platform for further growth and the potential to realise significant cost savings through synergies."

A difficulty for any takeover by Mr Boparan is Northern Foods's pension deficit which totals 142m. The Northern Foods and Greencore merger will see Northern put in 15m a year to reduce the deficit. Some analysts have said that Mr Boparan would have to offer a bigger sum to get backing from pension trustees.

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