(Adds names of further bidders)
HONGKONG/FRANKFURT, May 7 (Reuters) - German retail group Metro has made a tentative bid for private equity-owned Classic Fine Foods in a deal potentially worth $300-$400 million including debt, three sources familiar with the deal said.
Metro is aiming to expand its Asian operations with plans to buy the Singapore-based company which supplies upmarket hotels and restaurants with high-quality dairy, meat, pastry, seafood, pasta and dry products, the sources said.
The auction has also attracted interest from Australia-based Manassen Foods, which is owned by China’s state-owned Bright Food Group, Switzerland’s DKSH and several private equity firms including Bain Capital and Baring Private Equity, the sources said.
They said it was unclear how many of these potential suitors had actually placed preliminary bids.
EQT bought Classic Fine Foods in 2011, hoping to benefit from expected strong growth in the Asian high-end foods market, following economic growth in the region and an increased consumer taste for Western cuisine.
The Swedish investor has hired boutique firm Rippledot Capital Advisers to manage the sale, the sources said.
Classic Fine Foods is projected to have core earnings of about $25 million in 2015, one of the people said.
A deal value of up to 16 times forward earnings would be clearly above the average multiple of 8 that food retailers such as Marks & Spencer, Carrefour, Tesco or Kroger trade at.
But the bidders are ready to pay a premium to get a hold of a distribution network that could help them ride Asia’s boom in consumer goods and branded foods business, the sources said.
The buyer would get control of a niche business that imports, stores and distributes foodstuffs, and has about 700 staff.
Metro, EQT, DKSH and Bain declined to comment, while Manassen and Baring were not immediately available for comment outside regular business hours.
Metro has said it expects to become more active in acquisitions in future, starting small but potentially building up to “sizeable” deals. (Additional reporting by Matthias Inverardi in Duesseldorf, Anshuman Daga and Saeed Azhar in Singapore and Rupert Pretterklieber in Zurich)
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