Premier Foods sells Branston, crosses asset disposal target
Oct 30 (Reuters) - Premier Foods Plc said it sold its pickles and sauces business, including the Branston brand, for 92.5 million pounds ($148.22 million) to Japan's Mizkan Group, as part of its effort to trim debt, sending its shares up 8 percent.
Britain's biggest food producer has identified eight key brands and has been selling other businesses to reduce its 1.27 billion pounds debt, built up over an acquisition spree before the 2008 financial crisis.
Once the deal is completed, Premier Foods would have generated about 370 million pounds by disposing assets since March, when it secured a 1.4 billion pounds refinancing deal on condition that it would raise 330 million pounds by June 2014.
"They are a little bit more in control of their own destiny and therefore they haven't gotten engaged in what would be called panic sales or fire sales," said Shore Capital analyst Clive Black.
The company, which owns iconic British food brands such as Hovis bread, Batchelors quick meals and Mr. Kipling cakes, has sold businesses such as Hartley's jams, Sun-Pat peanut butter and flour brand Elephant Atta this year.
Analyst Black said the company may continue to sell businesses outside the top eight.
"I think if an offer came for one of those top eight brands that was deemed to be highly attractive, Premier Foods will look at that as well."
Tuesday's deal includes production, distribution and licensing of the Branston brand of Branston sweet pickle, ketchup, relish, salad cream and mayonnaise, along with Premier's Bury St Edmunds factory in Suffolk.
The company, valued at about 244.5 million pounds, said it will use the proceeds to repay debt.
Privately held condiment-maker Mizkan bought Premier's vinegar and sour pickles business, including brands such as Sarson's, Haywards and Dufrais, for 41 million pounds in July.
Shares in the company were up 8.4 percent at 111.12 pence at 0956 GMT on the London Stock Exchange on Tuesday. They have risen over 74 percent since the start of the year. ($1 = 0.6241 British pounds) (Reporting by Karen Rebelo in Bangalore; Editing by Joyjeet Das)