The auction for Dunbia could see the Northern Irish meat processor broken up, a senior City source has predicted.
This week Dunbia confirmed it has received several “serious expressions of interest” from would-be investors and a teaser document for the £800m business is in the process of being sent out to prospective buyers. .
Dunbia currently processes beef, lamb and pork at 13 sites around the UK and Ireland. One City expert said there are few players who could take on the business wholesale.
The source added ABP Food Group or a big international player such as Moy Park owner JBS could potentially do a deal for the 13 sites, but “the Dobson brothers will likely get best value breaking it up”.
“There is no single UK operator of scale that is active across pork, beef, chicken and lamb, so a piecemeal deal could be more likely.” the source said.
Dawn and 2 Sisters are seen as potential candidates for Dunbia’s beef and lamb business. Randall Parker could be interested specifically in the lamb business, while beef could attract ABP, Galloways and international players. Dunbia’s pork business could be eyed by Cranswick, Tulip and Karro. Dunbia exports meat products across Europe and more recently around the world, with acquisitions helping drive its revenues to £769m in the year to 30 March 2014.
However, the firm hasn’t been immune from current pressures in the global meat market, and profits almost halved, from £7.4m to £4.6m, in the past financial year.
A Dunbia spokesman said the business was “considering options for maximising the potential of the company”. “Market dynamics are continually evolving and we are currently exploring the best options to ensure that we are well placed to meet the demands of the marketplace, now and in the future,” he said.
“Whilst we are working on plans for the future, our focus very much remains on day-to-day operations and delivering a first class service to our customers.”
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