Takeover drama as board backs rival

The proposed tie-up between Northern Foods and Greencore Group plc seems to have been rejected after a weekend £342m cash bid by chicken tycoon Ranjit Boparan.

Northern Foods shareholders are now waiting to see whether Greencore decides to fight back after Northern's board, which previously backed the Greencore merger, opted to support the new offer instead.

Mr Boparan was given extra time on Friday night to come in with an offer for Northern Foods.

Now Greencore is considering its options after the 73p a share bid was put forward.

In a statement issued on Friday, the directors of Northern Foods urged shareholders to vote against the Greencore merger at a shareholder meeting on Monday, the same meeting at which shareholders had previously been urged to support the proposal.

'Compelling'

In a statement, Greencore said: "The board of Greencore notes the announcement of a recommended cash offer by BH Acquisitions Limited for Northern Foods plc and the press commentary over the weekend.

"The board of Greencore continues to believe that a combination with Northern Foods to create Essenta Foods represents a compelling opportunity for value creation for both Greencore and Northern Foods shareholders, through the formation of a business with increased scale in the industry and the ability to deliver substantial synergies around which the board has increased confidence.

"However, the board recognises the importance attached by the Northern Foods board to the certainty of cash value in their decision to change their recommendation.

"Given this latest development, the board of Greencore will now consider its options and as part of this process intends to seek the views of both Greencore and Northern Foods shareholders. A further announcement will be made in due course."

Mr Boparan currently holds 6.6 per cent of Northern Foods' shares.

He owns the Harry Ramsden's fish and chip chain and is a leading supplier of poultry to Tesco, Kentucky Fried Chicken, Sainsbury's and Marks and Spencer.

yep.businessdesk@ypn.co.uk

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