Premier looks to cut debt

Posted on 4 Oct 2010 by The Manufacturer

Premier Foods – the UK’s largest food producer – could be set to sell its vegetarian foods business, including the Quorn brand, in a bid to cut its enormous debts.

Quorn, bought for £172m in 2005, is now thought to be worth between £200m and £250m

After the deal was muted in the weekend press, the Hovis and Mr Kipling maker responmded by saying it remains “open minded” about such a deal, “provided they deliver shareholder value and accelerate the reduction of average net debt.”

That debt currently stands at £1.4bn.

Although it confirmed it had received approaches for its meat free business, “There can be no guarantee that such a transaction will take place,” the company said.

Its shares have risen 15 per cent as a result of the speculation.

The Press Association quotes an analyst who suggests Unilever and Nestlé could be potential buyers.