MELBOURNE (Reuters) – Private equity-owned Tegel Foods has appointed advisers to consider strategic options including a sale, a source told Reuters on Friday, in a deal that media say could be worth more than A$600 million ($530 million).
Poultry producer Tegel, owned by Pacific Equity Partners, has appointed Greenhill Caliburn and Morgan Stanley to consider options including a trade sale, the source said.
Tegel is New Zealand’s largest poultry producer with more than 50 percent market share and 1,550 workers, and could attract interest from food players in Australia and Asia.
An initial public offering is less likely than a sale given difficult market conditions, the source added.
A spokeswoman for Pacific Equity Partners declined to comment. Pacific Equity Partners bought the business in 2005.
Morgan Stanley and Greenhill Caliburn were not immediately available for comment.
Buyout firms generally hold firms for three to five years, during which time they overhaul and expand the businesses.
Private equity firms are waiting to exit from a huge pipeline of companies bought before the global financial crisis, but fragile equity markets have made initial public offerings unviable and trade buyers are dependent on securing funding.
Pacific Equity Partners appointed advisers early this year to consider potential sales of its Hoyts cinema chain and REDGroup book store owner, but both have been put on hold.
REDGroup, which owns Borders and the Angus & Roberston chains, warned on July 29 that it was close to breaching debt covenants due at the end of August after a period of weak sales. (Reporting by Victoria Thieberger; editing by Mark Bendeich)