Oct 30 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
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
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