Merger a mistake for Northern, says food millionaire

In an interview with the Yorkshire Post Mr Boparan claimed Leeds-based Northern has suffered from a "lack of leadership and direction".

The multi-millionaire, whose 2 Sisters Food Group is a leading chicken supplier to the UK's four biggest supermarkets, has until the end of next week to decide whether to make a cash bid for the pizza-maker or walk away.

Northern's shareholders meet at the end of the month to vote on its merger with Ireland's Greencore, which if successful would create a 1.7bn turnover chilled food group called Essenta Foods.

Mr Boparan said he has been looking at Northern for three or four years. Since the companies revealed their merger plans in mid-November he has grown his stake in Northern to 6.6 per cent.

"It was the right time, otherwise it's going to enter a merger which is completely wrong for the business," said Mr Boparan.

"Both businesses have lost 70 per cent of their shareholder value.

"Northern has been a declining business over the last decade and it's had lack of leadership and direction.

"It's got some great products; it's got some very good people; it's a long-established business.

"But it just needs revitalising. It's a business that in private hands would be better. We would run it differently."

The merger has been criticised by former chairman Lord Haskins as "two rather small companies leaning against each other".

Mr Boparan added Northern's strategy of challenging retailers has been "totally damaging". It closed its Fenland ready meals factory in 2008 after failing to agree terms with Marks & Spencer.

"We do not try to take our customers on in the way Greencore and Northern have done," he said. "Fenland was a perfect example. When two people are sitting around the table they can always find a solution."

The self-made tycoon would have to win approval from trustees of Northern's pension fund, which has a 140m deficit, and is cited by analysts as a major stumbling block to him scuppering the all-share merger.

He insisted he could afford a takeover, but would not be drawn on detail. His bid could require financing of up to 700m, according to bankers.

Credit Suisse analyst Charlie Mills has suggested Mr Boparan is most interested in Northern's chilled business, which makes sandwiches, sushi and ready meals, and could sell its Fox's biscuits and Goodfella's pizza operations to private equity.

"I would not look at any business unless I could afford it," said Mr Boparan. "Our job is not in any shape or form to sell any part of these businesses. We are here to build businesses, not sell businesses."

Mr Boparan, who is Tesco's biggest poultry supplier, also suggested retailers may be displeased at a shrinking supplier base. "Which retailer or customer would be happy to go from four suppliers to three suppliers?" he said.

The Essenta deal is due to create a business employing about 5,000 staff in Yorkshire. Mr Boparan said he plans to grow the business if he submits a successful bid.

"We would have to make some tough decisions but it would be in the interest of the long term rather than the short term," he said. "We are creators, not destroyers."

Northern is today due to update on recent trading.

A Northern spokesman said: "The recommended merger... would create a business with a strong platform for growth, the potential to realise significant synergies, a strong capital market structure and an agreement with the pension trustees, conditional on completion of the merger." Greencore declined to comment.

Chicken tycoon's rise and rise

Ranjit Singh Boparan, the West Midlands food tycoon, has grown his 2 Sisters Food Group into a 1bn turnover supplier from humble beginnings. The self-made businessman founded 2 Sisters in 1993 after starting out behind a butcher's counter.

2 Sisters now supplies poultry to most of the UK's leading retailers, as well as fast food chain KFC. Mr Boparan, 44, has been on the acquisition trail in recent years. In 2000 he purchased poultry processor Hillsdown Holdings, and in 2010 snapped up Dutch poultry firm Storteboom Group, adding 400m of turnover, and Yorkshire fish and chip group Harry Ramsden's.