Former Premier Foods' boss linked with Lucozade sale
Media reports suggest Clarke – whose exit from Premier Foods in January after just 18 months came as a shock to the industry – is advising Kohlberg Kravis Roberts (KKR) on a reported £1.5bn bid for the drinks brands, which are being offloaded by GlaxoSmithKline.
Global private equity powerhouse KKR – which has so far made no comment over Clarke’s reported role – owns retail outfits Boots and Pets at Home and is listed on the New York Stock Exchange.
GlaxoSmithKline has set a December sale date for the two drink brands, which are currently manufactured at the Royal Forest Factory in Coleford, Gloucestershire.
Core products
The company first announced plans to sell the brands in April following a strategic review. The firm said it wanted to concentrate on its core healthcare products.
While Clarke’s arrival would provide valuable food industry experience for KKR, city experts were doubtful that it would give the firm any clear competitive advantage.
“The experience he gained as chief executive at Premier Foods would help but I doubt this would put KKR any higher up the pecking order than before,” said one insider.
It also unclear what future role, if any, Clarke would take if KKR was successful. Experts suggest a non-executive board position is the most likely outcome.
Regardless of the impact of Clarke’s potential arrival at KKR, the outfit will face strong competition in the bidding process.
Last week it was revealed that AG Barr was considering a bid. The news that the Scottish manufacturer of Irn-Bru was in the frame came in the wake of a collapsed merger deal with Britvic. The deal fell apart even though the Competition Commission had given its backing to the merger.
Speculation
Meanwhile Vimto manufacturer Nichols is also thought to be keen on bidding. The firm admitted it was “monitoring developments" prompting speculation it was seeking to join with a private equity firm to fund the deal.
Analysts said it was highly likely private equity finance would have to fund any purchase from an existing industry outfit.
“I don’t think any manufacturer could do it on its own,” said one. “AG Barr could possibly do it, but it would require quite a large rights issue and it would be a real stretch on the balance sheet,” he said.
Japanese drinks company Suntory is also thought to be examining offers while a host of other private equity firms are thought to be in the fray in one form or another.
Bain Capital, Blackstone and Lion Capital and CVC Capital Partners are thought to be circling.
Clarke was replaced at Premier Foods by Gavin Darby. Last month the firm revealed underlying business trading profit was up 50% to £47.4M.
