Warburg Pincus Considers Premier Foods

Warburg Pincus, a global private equity investor, has been named as a possible investor in Premier Foods, a UK food group expected to announce a £400m rights issue this week.

Warburg Pincus, which raised a US$15bn fund in 2007, declined to comment on the speculation. The firm is said to be considering taking a 10% to 20% holding in Premier Foods following the capital raising.

CCMP Capital, a US private equity spin-out from JPMorgan, was again linked with Premier Foods earlier this week.

The New York and Houston-based investor, which also has an office in London, was reported in December to have been contacted by Premier Foods’ adviser Goldman Sachs regarding raising capital, then thought to have involved a £300m investment.

At around the same time, creditors Lloyds TSB and Royal Bank of Scotland agreed to postpone a test of its banking covenants until March of this year.

Goldman Sachs had been appointed to advise on the restructuring of Premier Foods’ £1.8bn debt. NM Rothschild is also reported to be advising, with Deloitte dealing with the food group’s creditors.

Others linked to the capital raising in December included The Blackstone Group, Permira, Bain Capital, Alchemy Partners and existing institutional shareholder Aberdeen Asset Management.

Individual asset sales have also been considered, with Premier Foods rejecting a bid from Heinz for its Sharwood cooking sauces and from United Biscuits for its Mr Kipling brands last November.

Earlier this week, Premier Foods completed the sales of its Martine Spécialités and Le Pain Croustillant businesses to Cerea Capital and Banexi Capital Partenaires for a net consideration of £44m. The sale of Sofrapain, a speciality bakery business, to Nutrixo for £8m is expected to complete in the second quarter.