Feb. 8 (Bloomberg) -- Premier Foods Plc, which makes Hovis bread, agreed to sell its canned-food business to Mitsubishi Corp.’s Princes unit for 182 million pounds ($294 million). The cash will be used to cut debt.
The canning business includes brands such as Crosse & Blackwell, Smedley’s and Fray Bentos, St. Albans, England-based Premier said today in a statement.
Canned-food consumption is falling in Britain and Premier wasn’t prepared to invest in the labels to promote them abroad, Chief Financial Officer Jim Smart said. More than half the unit’s sales are private-label and Premier wants to focus on brands such as Hovis and Sharwood’s cooking sauces, he said.
“We’re more than halfway to meeting our financial target on debt,” Smart said in a telephone interview. “I don’t have trouble with my debt. This isn’t a fire sale.”
Premier is not looking at selling Hovis, he said. The Mail on Sunday reported that the company had met with advisers to discuss a possible sale, an assertion Smart called “fundamentally untrue.”
While Premier is “open-minded” about offers on any of its businesses, Hovis is one of its key brands, and it’s unlikely to get a suitable bid because competitors would have antitrust difficulties, Smart said.
Last month, the company agreed to sell its meat-substitute brands, Quorn and Cauldron. That transaction, along with today’s, yielded a gross sum of 387 million pounds. The cash is being used to pay down debt, which totaled 1.37 billion pounds on June 26. Premier said it was approached about the canning unit in November.
The business employs 1,600 people in Lincolnshire and Cambridgeshire, eastern England, canning baked beans, vegetables, pasta and fruit, the company said.
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