Premier Foods is chewing over the sale of its loss-making own-label chilled foods and cake businesses RF Brookes and Avana Bakeries but the list of potential buyers is short, claim City sources.
Stamford Partners is understood to be advising Premier on a possible sale of the unit, which last month lost a £30m contract to supply Marks & Spencer with own-label pies.
Brookes Avana secured new business from other customers, but in a profit warning last week Premier admitted the unit would record a £10m decline in profit year-on-year in the first half. Brookes saw profits collapse from £15m to zero last year as it struggled to pass on price rises.
Speculation about a disposal of Brookes Avana has circulated for several years, but poor trading is believed to have hampered a deal. However, with tightened finances, management is tentatively tapping up buyers again. "There is not a great deal of firm interest," said one industry source. "Greencore is the favourite it needs a deal. But Premier was looking for £150m only a few years ago. They'd be lucky to get half that now."
Premier last week confirmed a pricing dispute with Tesco had cost it £10m, following a Grocer investigation into product delistings. It refused to comment on the sale.
Stamford Partners is understood to be advising Premier on a possible sale of the unit, which last month lost a £30m contract to supply Marks & Spencer with own-label pies.
Brookes Avana secured new business from other customers, but in a profit warning last week Premier admitted the unit would record a £10m decline in profit year-on-year in the first half. Brookes saw profits collapse from £15m to zero last year as it struggled to pass on price rises.
Speculation about a disposal of Brookes Avana has circulated for several years, but poor trading is believed to have hampered a deal. However, with tightened finances, management is tentatively tapping up buyers again. "There is not a great deal of firm interest," said one industry source. "Greencore is the favourite it needs a deal. But Premier was looking for £150m only a few years ago. They'd be lucky to get half that now."
Premier last week confirmed a pricing dispute with Tesco had cost it £10m, following a Grocer investigation into product delistings. It refused to comment on the sale.
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