Kellogg’s linked to United Biscuits tie-up

KELLOGG’S is understood to have hired advisers to evaluate a bid for United Biscuits which owns McVities.

News agency Reuters said it was in the early stages of exploring a bid for the company, but has not decided if it will move forward with an offer.

United has several factories and bases in the North West including a group business service centre in Liverpool, a Jacobs bakery in Aintree, a McVities factory in south Manchester and a Jaffa Cakes bakery on Crossley Road, Manchester. The company generates sales of around £1.3bn a year.

Reuters’ source said Kellogg’s and United Biscuits are not currently in negotiations. The story followed a Sky News report that Kellogg’s was working with investment bankers from Barclays on a possible £2bn bid.

According to Reuters United Biscuits’ private equity owners, Blackstone Group and PAI Partners, have been working on plans for a sale or an IPO that would take place by year-end. They would opt for a sale over an IPO if the offer were at a “very good price” above £2bn.

Kellogg’s, which has its UK headquarters in Manchester, is the latest company to be linked to an offer for United Biscuits. Chinese private equity firm Hony Capital was said to be considering a bid for the company in January.

As well as the McVities brand, the biscuits division includes Penguin, while the snacks business includes Hula Hoops and McCoys as well as KP.

Kellogg said it does not comment on speculation. United Biscuits did not immediately respond to a request for comment. A Barclays spokesman declined to comment.