Experts highlighted Premier’s spreads business, which includes Hartley’s, as the next in line for disposal as the firm seeks to raise its proceeds ahead of a potential deal with its banks.
Jeff Stent, an analyst at Exane BMP Paribas, told FoodManufacture.co.uk: “I think Premier would like to raise its proceeds prior to any deal with its banks. Obviously the proceeds would not be available immediately as deals take time. But I’m sure they would still be keen.”
Likely candidate
Stent confirmed that the spreads business was a likely candidate for disposal and predicted that Duerr’s could face competition from other firms interested in the business.
“There are other big jam players out there, so I suppose they could be interested.”
Graham Jones, an analyst at Panmure Gordon agreed. He told FoodManufacture.co.uk that he was certain that Premier would be selling the business. But he warned that price would be the key.
He said: “I think they would like to make disposals, yes. Obviously the spreads business is the big one and there are always firm’s out there [that would be interested]. I’m pretty certain they’ll sell the business but it depends on price. I don’t think they’d be willing to give it away.”
Family-run Duerr’s confirmed that it was still investigating possibilities to acquire Hartley’s from Premier after initially expressing an interest in January.
Investigating opportunities
Speaking at the time, Duerr’s md, Mark Duerr said: “As the biggest independent jam producer in the UK we are investigating opportunities related to the sale of Hartley's. If the business can align with our proud heritage, quality and history of innovation then naturally we would be interested, but it would be inappropriate to speculate on this without fully evaluating the business.”
Premier declined to comment on the potential bid, but stressed that discussions with its banks were “on-going and constructive.”
The firm set out five priorities in October last year, including a focus on its eight Power Brands, divesting selected businesses and agreeing a refinancing package with its lenders.
Last week The Sunday Times reported that the firm was on the brink of securing a new deal after Loyds and RBS agreed to renew £1bn of loans.
The negotiations follow Premier’s decision to delay a covenants test in December last year following a profit warning at the firm.