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Bosses battle for food group

Saturday 15 May 1999 23:02 BST
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CANDOVER, the UK venture capital firm, has teamed up with two directors of Hillsdown Holdings in an attempt to wrest control of the food group from the clutches of a US private equity firm, writes Dan Gledhill.

Michael Teacher, Hillsdown's chief executive, and fellow director, Rajiv Wahi, are this weekend putting the finishing touches to their bid for the company, whose household brands include Typhoo Tea and Buxted chicken. Their efforts have put them into conflict with the group's non-executive directors, who are backing a 127p-a-share offer from Hicks, Muse, Tate & Furst which values the company at pounds 464m.

Although Hicks, Muse has pledged to work with the management, Mr Teacher and Mr Wahi are thought to be keen to negotiate a deal with Candover which would give them a significant equity stake.

Sources close to the non-executives said that although they had recommended the Hicks, Muse offer, they would look at any other proposals. But City analysts believe the Hicks, Muse bid represents a fair price and Candover will struggle to top it.

The bid may herald the further break-up of Hillsdown, which demerged its house building and chilled foods operations last year. Hicks, Muse is thought to be interested only in Hillsdown's canning business and its Christie Tyler furniture arm.

Its interest is the latest in a series of moves by US private equity firms to exploit the eagerness of small UK companies to go private. Several, like Hicks, Muse, have opened London offices. These include Kohlberg, Kravis, Roberts - which last year bought UK insurance group Willis Corroon - and Clayton, Dubilier & Rice.

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