BOPARAN LTD, the company which has expressed a possible interest in mounting a counter-bid for Northern Foods, must make a firm intention for the company by January 21st, the British Takeover Panel said yesterday.
In a statement to the London Stock Exchange, the takeover panel said the company must announce either a firm intention to make an offer for Northern Foods, or announce that it does not intend to make an offer.
The panel said that no extension to the deadline will be granted without the consent of the panel executive.
In the event of Boparan announcing that it will not make an offer, it will be prohibited from making a fresh offer for the company within six months.
Under takeover rules, the target company – in this case Northern Foods – must request the takeover panel to seek a clarification from the interested party.
In October, Greencore and Northern Foods announced a proposed all-share merger which would result in the formation of a new company, Essenta.
On December 22nd, Boparan Holdings Ltd, a company controlled by Yorkshire-based chilled food tycoon Ranjit Singh Boparan, said it was at “a preliminary stage in evaluating a possible cash offer for the company” and was given access to all due-diligence material.
The British millionaire holds more than 6 per cent of Northern Foods through his wholly owned company, Saerimner. Since the announcement of the proposed merger between Greencore and Northern Foods, he had increased his stake from under 3 per cent to 6.6 per cent. Greencore and Northern Foods have scheduled shareholder meetings to approve the merger on January 31st. Yesterday’s announcement – known as a “day-50” clarification – requires the counter-offerer to offer a firm bid 10 days before the end of the offer period.
Northern Foods said it welcomed the announcement, adding that, to date, Boparan had not made an offer proposal to its board. Greencore also welcomed the development, and said that it “continues to believe” that the merger of Greencore and Northern Foods “represents a compelling opportunity for value creation for both Greencore and Northern Foods shareholders”.
Shares in Greencore finished 5.7 per cent stronger yesterday on €1.34 while Northern Foods stock slipped 2 per cent to 61.5 pence in London on weak volumes .
