Tycoon 'set to make bid for Northern'

Charlie Mills at Credit Suisse said in a note yesterday "a bid is more likely than not", adding an offer for the Leeds-based pizza maker will likely be pitched at 60p-65p.

Northern is trying to merge with its Irish rival Greencore to create Essenta, a 1.7bn turnover food manufacturer. Mr Boparan, who owns poultry supplier 2 Sisters, has until the end of the week to bid for the group or walk away.

"We would not expect that Rothschilds (20 years a Northern adviser) would team up with him unless his intentions were very serious," added Mr Mills.

However, Mr Mills' suggested the price is considerably lower than the 75p-80p range seen by Clive Black, analyst at Shore Capital. Shares in Northern yesterday closed up 2.5 per cent at 61.25p.

Leading investors are understood to have urged Northern not to sell out on the cheap. One major shareholder told the Yorkshire Post a cash bid will not automatically result in success, and pension trustees are key as Northern has a 107.8m pension deficit.

"The market is probably right to suggest that there will be an offer in due course," said the investor.

"(But) 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."