Commenting on the recent national press speculation that Dairy Crest and Kerry Foods were in the running to purchase the custard and rice pudding brand, Julian Wild, partner at business consultancy Rollits, said they weren’t very strong contenders compared to Müller.
“I would have thought that Müller would be a front-runner, as Ambrosia ticks both the dairy and the desserts boxes and they have the funds,” Wild said. “I would be surprised to see an overseas buyer which doesn’t have a strong UK position.”
‘Raise £100m’
In regards to Premier’s asking price for Ambrosia, which has been undisclosed so far, Wild added: “Premier are under a lot of pressure to reduce debt and they probably do need to raise something like £100m from Ambrosia to make a worthwhile dent in the debt, so that will be the aspiration.
“There is plenty of evidence for niche brands being sold for a multiple of turnover, particularly if there is quite a lot of competition.”
Both Premier and Müller declined to comment at this point.
Earlier this month, Premier revealed it was in talks to dispose of its Ambrosia brand as part of a new growth strategy, prompting concern from trade union Unite over the futures of the 300 workers at the brand’s south Devon site.
‘No certainty’
Departing chief executive Gavin Darby said: “Although there is no certainty that any transaction will complete, we will update shareholders in due course. We have a strong innovation plan in place for the second half of the year, and profit expectations for the full year remain unchanged.”
Unite regional officer Mark Richards said it was imperative that Premier Foods provided clear answers to begin to reduce the genuine anxiety being experienced by the union’s members.
“Workers also need answers on whether there will be a time limit on finding a buyer, so they can at least know when their future will be decided,” added Richards.