The Unigate food and transport group yesterday confirmed that it had been in talks with Hillsdown and had been prepared to offer shareholders just over #1500m subject to a recommended offer from the conglomerate's board.
However, as that was not forthcoming, the discussions were broken off.
But it said that it is continuing to evaluate its interest in the Hillsdown businesses in the light of the restructuring proposals that are now being put in place. The disclosure came in a formal Stock Exchange statement following weekend press speculation.
Unigate, chaired by former Grand Metropolitan director Ian Martin, said that it was prepared to offer a mixture of cash and shares which would value Hillsdown at 207p.
Market reaction was to push Hillsdown ahead 3.5p to 189p but the would-be predator saw its stock slide 17p to 668p, reflecting in part market fears that it would have to issue a large number of shares.
The use of the present tense in the statement was interpreted by the City as indicating that the only option that has been ruled out is a Unigate withdrawal as it has made it crystal clear it is primarily interested in the Hillsdown chilled foods business.
Chilled foods is due to be hived off as a separate company as part of the restructuring and which analysts have valued at around #340m.
The Fairview New Homes housebuilding division could have a market value approaching #320m as an independently quoted group, while the furniture manufacturing would be sold.
That would leave Hillsdown with a grocery and poultry business.
It owns HL Foods, which is the biggest producer of canned foods in Britain, Chivers Hartley jams and preserves, Typhoo Tea and Cadbury biscuits as well as Ross Breeders poultry and which may later be sold off.
The other poultry activities, such as Buxted chickens and Daylay eggs, will remain with Hillsdown.
The company, chaired by former Defence Secretary Sir John Nott, was refusing to make any comment on the Unigate move yesterday, saying the initiative lay in Unigate's court.
There is inevitably speculation that other companies such as Northern Foods and Danone of France could be interested in making an offer.
Under chief executive Sir Ross Buckland, Unigate has transformed itself in recent years.
That has been the result of selling off unwanted activities such as Mexican restaurants in the US and the stake in the Nutricia baby food business based in Holland as well as the Giltspur exhibitions subsidiary and the purchase of the Kraft European margarines and spreads operations.
However, the City has been pressing it to make a substantial acquisition for nearly two years and so far to little effect.
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