2 Sisters Food Group is considering a bid for Bernard Matthews, according to recent press reports.
Speculation surrounds Bernard Matthews as the subject of potential takeover by 2 Sisters
The meat processing group, which has hit the headlines a lot recently, is understood to be sniffing around the troubled turkey products manufacturer, The Sunday Times has claimed.
Beyond that, the newspaper offered few details in an article published yesterday (June 16).
Aside from 2 Sisters itself, Bernard Matthews is one of the top players in UK poultry processing, alongside companies such as Moy Park and Faccenda Group.
Clive Black, analyst specialising in the food industry at Shore Capital, told FoodManufacture.co.uk he had not heard anything about 2 Sisters’ interest in Bernard Matthews.
He also denied that he had heard of any approaches made to Moy Park or Faccenda Group. In Moy Park’s case, he said any overtures from 2 Sisters could spark competition issues, because the firm commands such a large slice of the UK poultry market.
However, he said the link between 2 Sisters, which bought Northern Foods in 2011, and Bernard Matthews would raise few eyebrows, although its current debt level could impede its ambitions.
“2 Sisters has been acquisitive and it is not surprising to see its name associated with any potential activity albeit it is constrained by its balance sheet to some extent.”
‘Exploring options’
Responding to the rumours, Bernard Matthews re-released a statement issued last month to FoodManufacture.co.uk revealing it was “exploring a range of options with PWC to accelerate the company’s existing growth strategy and infrastructure developments”.
“All the options will only be evaluated once the process is completed.”
The statement reflects the company's search for financial backing and could mean, conversely, that other players such as Moy Park or Faccenda Group might also be considering bids. In addition, the purchase of only some Bernard Matthews assets, rather than the whole business, could be a consideration.
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Speaking about possible takeover targets for 2 Sisters, one source close to the business said: “2 Sisters are primarily poultry so they must be looking or they would be daft. Regarding Moy Park, the same rules would apply – how can they build their business, what should they be looking at? I have not heard anything, but I expect they would look.”
Bernard Matthews is known to be struggling in the wake of the death of the man behind the name.
Management and staff are currently in consultation over proposals to cut 55 jobs at its Great Witchingham cooked meats factory in Norfolk, which employs 400 people. In addition, family concerns over the Bernard Matthews estate are understood to have caused instability there.
However, these recent troubles could interfere with any takeover process, rather than facilitate it.
Responding to rumours of a link between 2 Sisters and Bernard Matthews, Julian Wild, food group director at legal firm Rollits, said: “I can’t say I’m surprised.
‘On a roll’
“There’s no doubt Ranjit [Boparan] is on a roll with 2 Sisters. He’s trying to grow that group very rapidly.”
He added: “He would have a look at anything else in the poultry field.”
He also pointed out that Moy Park was part of Seara Foods, a unit of Marfrig Alimentos, which had recently announced the sale of its Seara Brazil unit to JBS, the world’s biggest meat processor.
Given that sale, Marfrig could feasibly be looking to offload related European business concerns, which could put Moy Park in the frame for a sell-off.
2 Sisters itself refused to comment regarding the rumours surrounding Bernard Matthews.