Greencore mulls cash sweetener for Northern - report

Greencore is considering a cash sweetener to its offer for Northern Foods after its target abandoned talks over a planned merger to back a higher bid by food tycoon Ranjit Boparan, it was reported today/

Food manufacturer Northern Foods agreed on Friday to be taken over by Boparan in a deal valuing the business at 342m.

The maker of Goodfella's Pizza and Fox's biscuits is recommending that shareholders back a bid of 73 pence per share by Boparan and said it had withdrawn its support for a takeover by Irish food manufacturer Greencore.

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However, a national newspaper said sources familiar with the situation told it that Greencore was expected to return with a revised offer which was likely to contain a cash element, though not a full cash bid.

Greencore is expected issue an announcement to the stock exchange later on Monday, it was reported elsewhere.

A source close to the talks told The Times: "Greencore very much understands the importance of cash and will take this into account when it is considering its options."

Northern has withdrawn its recommendation of an all-share merger with Irish food company Greencore. Anthony Hobson, the chairman of Northern Foods, said the bid from Mr Boparan was "a compelling opportunity for our shareholders to realise a cash exit, and as such, the board of Northern Foods will be unanimously recommending that Northern Foods' shareholders accept Boparan's offer."

Mr Boparan made an original approach last November, after Northern Foods agreed to merge with Greencore to create a new company called Essenta Foods.