Premier Foods, the biggest manufacturer of branded foods in the country, has approached a string of private equity groups about the sale of a stake in its bread unit.
Premier’s chief executive Gavin Darby, who joined in January, is understood to have approached Ondra Partners, a mergers and acquisitions advisory firm, to lead the search for outside investment.
It is said a range of options are being considered for the food manufacturer, which also produces own-label ranges for some of the UK’s biggest supermarket chains.
One potential option is for Premier to spin off its bread division from the rest of the business. It would then be co-owned by Premier and an investor.
Premier Foods considered a sale of the entire bread division last year and had appointed Goldman Sachs to test the waters but this is now off the table.
The group’s Hovis business, which was created in 1886, has already closed two bakery sites in Greenford, west London, and Birmingham, which were built in the 1950s and 1960s.
Premier Foods’ plans to close three bakeries and two mills led to 900 job losses and restructuring costs are expected to be £28m in the full year.
Approximately 4000 people work across the company’s bread operations – almost half of Premier Foods’ total workforce – which have been saddled with stubbornly high operating costs, poor industrial relations and the loss of a number of key contracts.