Blackstone, PAI prepare for United Biscuits carve-up
Private equity-owned United Biscuits, a one-time target of China’s Bright Food Group, is preparing to spin out its salty snacks business in a potential GBP500 million ($780 million) sale. The Blackstone Group and PAI Partners are keen to separate the UK firm’s salty snacks division from its larger biscuit business.
According to the Financial Times, Credit Suisse has been lined up to consider options for the spinout, which include a sale. Private equity firms and strategic investors are expected to be drawn to the asset, although an auction is unlikely before 2013.
Blackstone and PAI previously bought United Biscuits in 2006 for GBP1.6 billion. In July 2010, J.P. Morgan and Goldman Sachs were appointed to sell off the entire business for more than GBP2 billion. Bright Food entered into exclusive negotiations over a bid that valued the group at GBP2.5 billion including debt, but talks broke down.
This was one of a string of failed investments by the Chinese firm, which is keen to diversify its business overseas. Bright Food also reportedly walked away from negotiations with US vitamin retailer GNC Holdings over a purported $2.5 billion deal; it lost out in the bidding for Sucrogen, CSR's sugar and bio-ethanol business, which was bought by Wilmar International for $1.88 billion; and it failed to secure yogurt brand Yoplait over General Mills, despite bettering the US firm's $2.2 billion enterprise valuation.
Bright Food did ultimately make the breakthrough, acquiring CHAMP Private Equity's 75% stake in Australian food producer and distributor Manassen Foods last August. It is unclear whether the Chinese firm will re-enter the fray for United Biscuits.
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