Just three bidders are left in the competition to acquire United Biscuits.
Turkish food group Ulker Biskuvi Sanayi, UK company Burton’s Biscuits and established US cereals name Kellogg’s are all in contention to take over the firm, which owns the perennially popular McVitie’s brand as well as cracker maker Jacobs.
All three have now submitted final detailed bids to take over the company from private equity firms Blackstone and PAI Partners, with rumour suggesting that Kellogg’s is in the strongest position.
The company, which owns a huge number of cereals including Corn Flakes, Coco Pops, Crunchy Nut and a number of other big names, has reportedly lined up nearly £2 billion in financing to support a deal.
According to the Telegraph, Kellogg’s is currently trying to diversify its product offerings in the snack category to offset a downward trend in cereals. Two years ago it also purchased the Pringles crisps brand for £1.6 billion.
But it reportedly has concerns about the amount of modernisation that may be required at some of United’s factories, and representatives have already visited the facility at Tollcross in Glasgow to get an idea of the amount of work that will need to be done.
However, Burton’s has also moved to shore up its legal position on the acquisition by preparing for concerns over competition in the popular biscuits category. The firm, which is behind favourites such as Jammy Dodgers and Wagon Wheel, has agreed to sell its license to make Cadbury’s Fingers back to US firm Mondelez if it does manage to gain control over United.
Filipino name San Miguel, Saudi Arabian Savola Group and Italy’s Ferrero have all previously been linked to the bidding war, while there had also been speculation that United could opt for an initial public offering on the stockmarket as an alternative means of raising finance. Given how close the final round of bidding appears between the three main candidates, all of these options now appear highly unlikely.