Bright Food Group Co., Shanghai’s biggest food and dairy company, is in discussions for a possible acquisition of the U.K.’s United Biscuits from Blackstone Group and PAI Partners.
The Sunday Times reported yesterday that Bright Food is in exclusive talks to buy United Biscuits, the maker of Jaffa Cake and McVitie’s cookies, in a transaction that may be valued at 2 billion pounds ($3.2 billion).
“Bright Food is now in talks about buying United Biscuits,” Chen Chunshan, a company spokesman in Shanghai, said in a phone interview yesterday, declining to comment further.
The Chinese company is seeking acquisitions abroad as Chairman Wang Zong Nan aims to build it into a leader in the nation’s food industry. In July, Bright Food failed to buy CSR Ltd.’s Australian sugar unit, beaten to the $1.5 billion acquisition by Wilmar International Ltd. Its Bright Dairy & Food Co. unit won regulatory approval yesterday from New Zealand to buy a 51 percent stake in Synlait Milk Ltd., a processing company converting more than 300 million liters of milk a year.
Bright Food affiliate Bright Dairy & Food Co. rose 5 percent to 10.13 yuan at the 3 p.m. close of trading on the Shanghai stock exchange, the biggest increase since July 19. The stock has gained 6.3 percent this year compared with a 20 percent decline for the benchmark Shanghai Composite Index.
Phone calls yesterday to United Biscuit’s head office in Hayes outside London and its business center in Liverpool went unanswered.
Peter Rose, a Blackstone spokesman in New York, and Natasha Baxter, a spokeswoman in London, didn’t immediately respond to phone messages seeking comment from Bloomberg News. Blackstone and Rothschild declined to comment, the Sunday Times said.
Blackstone and PAI in July hired Goldman Sachs Group Inc. and JPMorgan Chase & Co. to prepare an auction of United Biscuits, and food companies including Campbell Soup Co. and Nestle SA may be interested, the Sunday Times said, without saying where it got the information. N.M. Rothschild & Sons Ltd. was hired by Bright Food as an adviser, the newspaper said.
United Biscuits was founded in 1948 after the merger of two Scottish companies, McVitie & Price and MacFarlane Lang, and its brands are sold in more than 100 countries. Earnings before interest, taxes, depreciation and amortization rose 14 percent last year to 223.24 million pounds on sales of 1.26 billion pounds last year, according to its annual report.
Blackstone and PAI bought the company in 2006 for $3 billion.
Bright Food, established in August 2006, is partly owned by the Shanghai Municipal Government and Shanghai DaSheng Holdings Co. and has registered capital of 3.43 billion yuan ($512 million), according to information on its website.
Its businesses include farming and fisheries, food processing, wholesaling, logistics and retailing as well as real estate and taxi services.
Bright Dairy boosted this year’s first-half net income 35 percent from a year earlier to 61 million yuan, it said on Aug. 27.
Bright Food’s plan to buy control of Synlait deal still needs approval from the Shanghai government, according to a statement.