RLPC-United Biscuits salty snacks sale enters final stage

LONDON Wed Nov 21, 2012 10:29am EST

LONDON Nov 21 (Reuters) - The sale of the savoury snacks arm of British firm United Biscuits is heating up as private equity firm Lion Capital dropped out of the race and Japanese snacks group Calbee made a late entrance, banking sources said.

United Biscuits owners Blackstone and PAI kicked off the auction in August by hiring Credit Suisse.

The sale is expected to fetch less than the 500 million pounds ($800 million) the sellers hoped to get, while some buyers are unsure of the new management team that has been installed to run the division, bankers said.

Lion Capital's exit leaves CapVest and Pamplona Capital - backed by Russian billionaire Mikhail Fridman - as the remaining private equity firms looking at the maker of Hula Hoops and KP Nuts, bankers said.

German trade buyer Intersnack, the maker of Vico chips and Penn State pretzels, is also still interested, bankers said.

Calbee, which has hired Rothschild to advise it, is considering a tie-up with another potential buyer to make a joint bid, bankers added.

Final bids are due at the end of November.

Blackstone and PAI declined to comment, while United Biscuits was not available to comment.

Bankers are working on debt packages of around six times the company's approximate 60 million pound EBITDA - a level some bankers said was "getting quite aggressive".

Financing will likely be a mix of senior leveraged loans and more expensive mezzanine debt.

Lion Capital, CapVest, Intersnack, Pamplona all declined to comment. Calbee was not available to comment.