Decision time in battle for Northern Foods

Shareholders have until 1pm on Wednesday to decide whether to accept the chicken tycoon’s 73p per share bid.

Dublin’s Greencore must decide whether to add cash to the all-share offer that was at the heart of its now abandoned plan to merge with Leeds-based Northern, or walk away.

Greencore is understood to have been in talks with private equity to help fund its bid, and is also thought to have briefly courted food group Nestle with a view to splitting off Northern’s brands which include Fox’s biscuits and Goodfella’s pizza.

A spokesman for Greencore yesterday said it continues to “consider its options”, but declined to comment further.

Northern’s shares closed at 74.25p on Friday as the market factors in a Greencore counterbid.

Winning over Northern’s pension trustees will be key to a second approach from Greencore, although trustees are thought to be adverse to a split-up of the group.

Mr Boparan, who now holds 11.4 per cent of Northern’s shares, agreed with trustees to seek their approval for any disposal of Northern’s assets worth more than £20m. He also agreed not to pay himself a dividend from Northern for three years.

He will inject £15m a year into Northern’s pension scheme for the next 10 years, significantly less than analysts were expecting.

Northern had a £138.9m pension scheme deficit as of October last year.

The entrepreneur, a major chicken supplier to the UK’s big supermarkets, plans to combine Northern with his 2 Sisters Food Group to create a £2bn turnover privately-owned food conglomerate with significant exposure to the UK’s supermarkets. The combined group would have 31 manufacturing sites and about 15,0000 staff.

The acquisition will be largely funded with debt from Goldman Sachs, at a rate of five to six per cent above LIBOR (London Interbank Offered Rate).