Ferrero Group, the Italian confectionery giant, is plotting a £250m takeover of Fox’s Biscuits amid a battle for control which has drawn some of the sector’s biggest names.
Sky News has learnt that Ferrero, the family-controlled dynasty behind Kinder chocolate and Nutella, is working with advisers on a bid for Fox’s.
The biscuit-maker’s current owner, 2 Sisters Food Group (2SFG), has asked for offers to be submitted this week, according to insiders.
Other bidders are expected to include Burton’s Biscuits, which owns Jammie Dodgers, and Biscuit International, a European manufacturer of private-label products.
A takeover by Ferrero would see it become a substantial player in Britain’s biscuit market, which has seen a surge in sales this year as a result of the coronavirus outbreak.
The UK-wide lockdown and sharp increase in the number of Britons working from home have triggered a spike in demand for biscuits, even as long-term consumption trends show consumers switching to healthier snacking products.
Fox’s is expected to command a price of between £250m and £300m, according to one industry source, with the auction expected to conclude by the end of the year.
Ferrero is understood to be being advised by Houlihan Lokey, while Rothschild is overseeing the auction process.
It would represent the latest in a string of disposals by 2SFG, which is one of Britain’s largest private sector employers, with a workforce of about 18,000 people.
The company, owned by a businessman dubbed ‘the chicken king’ because of its extensive poultry interests, has sold assets including Goodfellas, the pizza brand, and Matthew Walker, the UK’s biggest supplier of Christmas puddings.
2SFG’s parent company, Boparan Holdings, has £630m of debt repayable in 2021 in the form of high-interest bonds.
Earlier this year, the group appointed the heavyweight businessman Richard Pennycook as chairman, a move which was welcomed by investors.
2SFG’s ability to invest in its operations has been hampered by the fact that it has to meet an annual bill of more than £50m in interest payments alone.
It said in a recent update to investors that trading had continued to improve and that it was examining opportunities to refinance its existing capital structure.
The company added that it continued to move towards the goal of becoming “a poultry-focused business”.
“To reach this objective, the company continues to explore the disposal of non-core businesses, such as its bakery division, but the group will only dispose of these businesses when the time is right and the company is confident of realising the best value,” it said.
More than 15,000 of 2SFG parent company Boparan Holdings’ employees are based at various manufacturing sites across the UK.
Ranjit Boparan, 2SFG’s controlling shareholder, also owns restaurant chains including Ed’s Easy Diner and Giraffe, and bought the remnants of Carluccio’s from administrators earlier this year.
A spokesman for 2SFG declined to comment, while Ferrero could not be reached for comment.