Oaktree Capital laps up British ice cream maker |
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Fri, 05 May 2006 15:05
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LONDON: Britain's largest ice cream maker Richmond Foods Plc. has agreed to be bought over by Los Angeles-based fund manager Oaktree Capital Management LLC for 182 million pounds.
Richmond Foods, which makes Fab lollies and Original Screwball Cones, said Thursday Oaktree envisages combining it with German ice cream business Roncadin, which the latter had acquired in December last. The deal, at 750 -pence-a-share and which has to be approved by Richmond Foods shareholders, will enable the company to offer a 3 pence-a-share interim dividend prior to completion of the takeover.
The offer price is 24 per cent higher than the company's closing share price on 4 April, the day before Richmond Foods said it had received an offer.
Richmond Foods has, in the last six years, consolidated its position with five acquisitions, including Nestle U.K.'s ice cream business in 2001. It was eyeing Roncadin when the firm was put on the block, but Oaktree Capital offered a higher price. The two companies have been in talks since January.
The Richmond Foods-Roncadin combination will be the largest European ice cream maker.
Richmond Foods chief executive officer James Lambert said he expected the takeover to be completed by 7 July. He will continue as chief executive officer, but chairman Ross Warburton will step down after the transaction.
He said the company will continue to make Nestle-branded products in the U.K. and sell private-labeled ice cream to supermarkets. All its three production centres in the country employing some 850 people will remain open.
Oaktree Capital's managing director Caleb Kramer said the idea is for Richmond Foods to remain focused on its core geographical market. But, the combination with Roncadin will leverage both companies' strong market positions and reputation for high quality products "to enable us to serve customers on a pan-European basis."
Richmond Foods shares rose as much as 38.5 pence to 740 pence in London.
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