Greencore Surges After Saying Received Preliminary Approach

Greencore Group Plc, the Dublin-based sandwich maker whose merger with Northern Foods Plc failed this year, rose in trading after saying it was in talks about a possible offer.

Greencore rose as much as 25 percent in Dublin trading, after saying it is in preliminary discussions about an approach that may lead to an offer, without saying who made the approach.

Chief Financial Officer Alan Williams said in May the “company is not up for sale,” after a newspaper report that it had hired Barclays Plc to advise on deals. The company, which said in July it is buying Uniq Plc to expand its offerings to supermarket operators, sells sandwiches and chilled foods to some of the U.K.’s largest retailers including Tesco Plc.

In June, the Daily Mail newspaper reported on its website that Associated British Foods Plc and U.K. private equity fund manager Doughty Hanson may be among possible bidders for Greencore.

The shares closed up 9.5 percent at 68 euro cents, giving the company a market value of 260.7 million euros ($363 million). Before today, the stock was down 38 percent this year.

“It could be that management is involved in an offer given how weak shares have been recently, it could be private equity,” said Clive Black, an analyst at Shore Capital in London. “Greencore is actually a good business, it is one of the leading players in the U.K. prepared private label market. The reason we have had a positive stock recommendation on Greencore is that we felt it was undervalued and today’s approach kind of vindicates that.”

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