Tycoon expected to make Northern deadline offer

The West Midlands-based entrepreneur has until 5pm today to bid for the pizza and pie maker, with an offer broadly expected before the Takeover Panel-imposed deadline.

Shares in Leeds-based Northern closed last night at 60.5p, as the stock market continued to factor in the high likelihood of a bid.

An offer could scupper the recommended all-share merger between Northern and Ireland's Greencore, a nil-premium deal to create a 1.7bn turnover group called Essenta Foods.

Mr Boparan and his advisers Rothschild are understood to have been locked in late night talks in recent days with trustees of Northern's pension scheme, which has a 142.3m deficit. Analysts see this as the major stumbling block to the poultry magnate.

Under the terms of the Essenta merger, 15m would be injected into the Northern pension scheme annually – a deal which took three months to secure. Analysts believe any bid from Mr Boparan is likely to be conditional on gaining support from the trustees.

Mr Boparan is also thought to have lined up lenders, including Lloyds Banking Group, to help finance the acquisition.

Analysts believe Mr Boparan's bid could range from 54p to 80p a share, valuing Northern from 253m to 375m. The Essenta deal prices Northern at 50p a share.

However, there are concerns a Boparan bid could saddle Northern with significant debt. Risk-averse lenders would also be likely to set testing covenants as a condition of a highly leveraged deal.

One analyst suggested a bid by Mr Boparan could force Greencore to offer a cash sweetener for Northern. Greencore is not thought to have ruled out the possibility of a cash supplement, but it would reduce the 40m savings expected to flow from the merger.

Northern is believed to have sounded out investors about the competing offers this week.

One leading investor recently told the Yorkshire Post it is "sitting on the fence" until Mr Boparan's plans become clear.

"It would depend on what form any bid comes," they said. "It may end up being subject to the trustees. The pension trustees have a very strong position.

"There are plenty of transactions that have not seen the light of day because of that – quite rightly so because of the interest the pension fund has in the company's future."

Mr Boparan currently has 6.6 per cent of Northern's shares. His 2 Sisters Food Group is a major supplier to supermarkets and restaurants including Tesco and KFC.

An industry source said even if he is successful with a bid, Mr Boparan has a huge challenge to make the acquisition work.

"He's very quick on his feet," said the source. "But it's a hell of a difference taking over a plc to running a chicken business. I think this is hugely testing for him."