Premier Foods in talks with Princes over two sites
Premier, which has told analysts that it is "open minded about disposals of assets if by doing so we can achieve our financial objective more quickly" said it would "not comment on rumour and speculation".
However, FoodManufacture.co.uk understands that talks have been progressing with Princes in recent weeks, representatives of which have visited both sites. A visit from Princes' parent company Mitsubishi is scheduled for Monday (November 15).
The Wisbech site, which employs more than 460 people, makes Loyd Grossman sauces (pouches) plus canned beans, soups and pasta; while Long Sutton, which employs more than 600 staff, makes Fray Bentos pies, baked beans, canned vegetables, meat; puddings and other products.
Both sites picked up new business and took on more staff when Premier closed the Campbell's factory in Kings Lynn.
It is not clear how any deal with Princes would impact on staff working at Premier's warehouses at Lynn Road, West Norfolk, Salter and Cromwell Road.
A credible buyer
Panmure Gordon director of equity research Graham Jones told FoodManufacture.co.uk: "Selling Long Sutton and Wisbech in my view would make a lot of sense – gets rid of one of the perennial under-performers as well – own-label canning. Princes would I think also make a credible buyer."
Princes, which is owned by the Mitsubishi Corporation, is a leading supplier of canned fish, meat, fruit and vegetables, specialising in own-label products for the supermarkets and the catering sector. However, it also owns brands including Napolina, Crisp 'n Dry, Shippam’s, Jucee, Aqua-Pura and Princes.
A spokeswoman said: "Princes does not comment on market speculation.”
'Open-minded' about disposals
Premier Foods has made it clear all year that it is ‘open-minded’ about selling off assets - notably its meat-free business - to pay off debts, provided the price is right.
In a statement issued to the stock exchange early last month , Premier Foods said it had "received approaches that may or may not lead to a sale of its meat-free business, including Quorn".
The firm, which recently unveiled plans to contract out production of more of its Quorn and Cauldron meat-free lines after failing to resolve "production inefficiencies", said: "The Board remains open-minded about disposals, provided they deliver shareholder value and accelerate the reduction of average net debt/EBITDA (earnings before interest, tax, depreciation and amortisation)."
Bosses would consider selling any part of the business provided that this did not diminish the capacity of the remaining business to repay debts and service its pension deficit, it added.
However, meat-free was probably the only business likely to interest multinationals such as Nestlé, although others such as Rank Hovis, RF Brookes, Avana Bakeries and Charnwood (pizza bases) might be of interest to more UK-focused firms or private equity players, said analysts.
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