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United Biscuits Said to Draw Interest From China’s Hony Capital

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Hony Capital CEO John Zhao
John Zhao, chief executive officer of Hony Capital Ltd. Photographer: Nelson Ching/Bloomberg

Jan. 15 (Bloomberg) -- Hony Capital Ltd., the Chinese private-equity firm that manages more than $6.8 billion, is examining a potential bid for United Biscuits Holdings Ltd. that could involve teaming up with a corporate buyer, people familiar with the matter said.

Beijing-based Hony has held informal talks with owners Blackstone Group LP and PAI Partners SAS about acquiring the maker of Digestives biscuits, said the people, who asked not to be named because the deliberations are private. It’s not clear whether Hony will proceed with an offer, said the people, who declined to identify the potential partner.

Blackstone and PAI bought United Biscuits for more than 1.6 billion pounds ($2.6 billion) in 2006, data compiled by Bloomberg show. In 2010, the funds failed to sell the whole company to Bright Food Group Co., Shanghai’s biggest food and dairy company, and decided to split the snacks and biscuits businesses to facilitate an exit.

Bright Food isn’t in any talks to buy United Biscuits, spokesman Pan Jianjun said in a phone interview. Officials at Hony, Blackstone and PAI declined to comment.

While PAI and Blackstone have received approaches for United Biscuits in the past, there are currently no imminent plans to sell the business, according to two people familiar with the matter. The buyout firms are working with banks including JPMorgan Chase & Co. as they consider their options, one person familiar with the situation said.

United Biscuits’ owners sold the KP snacks unit last year for more than 400 million pounds, people familiar with the deal said at the time.

Suning, Zoomlion

United Biscuits, based in Hayes, England, was created in 1948 from the merger of two Scottish companies, McVitie & Price and MacFarlane Lang. It competes with companies including U.S. snack makers Snyder’s-Lance Inc. and ConAgra Foods Inc.

Hony was set up in 2003 by Legend Holdings Ltd., the parent company of China’s largest computer maker Lenovo Group Ltd. The private-equity firm, led by Chief Executive Officer John Zhao, has a history of linking up with Chinese companies for acquisitions.

Suning Commerce Group Co., China’s largest electronics retailer, said in October it plans to invest $420 million in video website PPTV.com together with Hony. In 2008, Hony joined a group led by China’s Changsha Zoomlion Heavy Industry Science & Technology Development Co. to take over Cia. Italiana Forme Acciaio SpA, an Italian maker of concrete-mixing equipment, for 271 million euros ($371 million).

In December, Hony was part of a group led by Cosco Container Industries Ltd. that agreed to pay HK$3.86 billion ($498 million) for a stake in China International Marine Containers (Group) Co.

To contact the reporters on this story: Zijing Wu in Hong Kong at zwu17@bloomberg.net; Cathy Chan in Hong Kong at kchan14@bloomberg.net; Kiel Porter in London at kporter17@bloomberg.net

To contact the editors responsible for this story: Philip Lagerkranser at lagerkranser@bloomberg.net; Aaron Kirchfeld at akirchfeld@bloomberg.net

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