The comments come after press reports that a number of private equity businesses, including Permira and PAI, were considering a combination of Symington’s and the Premier brands, which include Sarson’s vinegar, Angel Delight and Roberton’s marmalade.
Experts said that the purchase of Symington’s would give investors the necessary infrastructure to take Premier’s brands on, but warned that they were “non-core for a reason”.
Damian McNeela, an analyst at Panmure Gordon, told FoodManufacture.co.uk: “The problem is, Premier’s non-core brands are non-core for a reason. As a private equity buyer, you’re not suddenly going to wake up one morning and make a bid for Sarson’s vinegar on its own. You may have the brand management but you would also need the central functions that Symington’s could provide.”
But McNeela stressed that the combination of the two businesses would “create a creditable purchaser” for Premier’s stable, as the firm seeks to reach the required £330M disposals target set by its lenders.
“We believe that the combination of these brands would create sufficient scale to be attractive to private equity and, in doing so, creates a credible purchaser for Premier’s non-core assets,” he said.
“As part of its re-financing agreement, Premier agreed to make £330M of disposals by June 2014. The emergence of a number of possible purchasers of its non-core brands should therefore improve the chances of achieving this target.”
Premier Foods declined to comment on the interest, announced by The Sunday Times, but has previously stressed that its road to recovery, after a troubled 2011, depended heavily on a focus on its eight power brands.
But despite denying that the business was up for sale, Symington’s md David Salkeld, confirmed that it was seeking further investment with a view to acquiring the Premier brands.
“Premier Foods is looking to get rid of products in three areas: pickles and vinegars, jams and spreads and dried foods,” he told the Yorkshire Post.
“We are interested in looking at all those areas. Our representatives are talking to their representatives and examining what the options are.”
Symington's purchased several brands, including the popular Chicken Tonight, after a management buyout in 2007.
Meanwhile, last week, Premier confirmed the completion of its long-awaited re-financing deal with its banks.
The firm revealed that it had completed the signature of the formal documents and that the new arrangements were in place with “immediate effect”.