Greencore gets 'consolation prize'

The industry views Greencore's plans to take over troubled own-label chilled foods business Uniq in a cash bid valued at £113M as a consolation prize for its failure to get its hands on Northern Foods. The latter was snapped by Ranjit Boparan, owner of the 2 Sisters Group, earlier this year for £342M.

City analysts and business insiders have suggested to Food Manufacture that Greencore chief executive Patrick Coveney paid over the odds for Uniq, since he couldn't be seen to miss out again. Food group Samworth Brothers is also known to have been interested in parts of the Uniq business.

The trouble is that, while Uniq's convenience business with Marks & Spencer (M&S) was the main prize, the deal came with Uniq's "problem child": the Minsterley desserts operation in Shropshire, which has continued to hit the headlines over the past month.

Late in August, Uniq announced that, following a review, it was ceasing production of Minsterley's low margin 'everyday' desserts in the first half of 2012. Instead, it was choosing to focus on premium desserts, for which it hopes to command better margins.

Around 350 jobs are set to go as result of this decision, which has inevitably upset the unions. Unite is particularly worried that this could presage the start of a round of further redundancies as Greencore consolidates Uniq's operations into its own when the takeover has been completed.

Analysts Dr Clive Black and Darren Shirley at Shore Capital and other commentators expressed surprise that a decision wasn't made to close the Minsterley plant. The site will retain around 100 staff to make licensed products under the Müller and Cadbury labels, while the premium desserts business will be transferred to Uniq's Evercreech facility, which makes desserts for M&S, and will become the company's dedicated desserts operation.

The announcement followed news, which emerged in July, that Uniq also planned to exit premium yogurt manufacture in April 2012.

Uniq, which employs around 2,000 staff at four factories at Minsterley (desserts), Spalding (salads), Evercreech (desserts) and Northampton (sandwiches and wraps) is being sold by its pension fund, which acquired control (90.2% of the shares) of the company as part of a £400M+ (£473M at July 31 2010) pension deficit for equity swap in March. Greencore expects to complete the Uniq acquisition by the end of this month (September), subject to regulatory approval.