Stonegate sale only weeks away
Britain's second biggest egg packer could be in the hands of a new owner in a matter of weeks.
The sale of Stonegate was ordered by the Competition Commission early last year when it ruled that the creation of Noble Foods – formed following the merger of Deans Foods and Stonegate – would lead to a "substantial lessening of competition" when it came to supplying eggs to retailers and procuring supplies from producers.
With the CC deciding that only the divestment of either Deans or Stonegate would provide an acceptable remedy, Stonegate went on the market last May. It was reported that within days a number of companies had expressed an interest in the sale but in the end it was whittled down to two potential purchasers gaining the necessary approval from the CC.
One of those was ex-Kerry Foods executive Michael Looney and the other was current managing director of Stonegate, Pam Corbett. With Looney's bid falling short of Corbett's, his offer has now been formally rejected by Noble Foods and negotiations with Corbett have entered the final stage. The bid is thought to be around £30 million for a company listed as having net assets of £50M.
The sale will include a state-of-the-art packing centre based at Lacock, Wiltshire, along with an egg processing business and approximately twenty farms, including cage, barn and free range laying sites as well as rearing units.
Any purchaser is bound to be seeking assurances for continued custom from Stonegate's major customers, such as Asda and Waitrose, before competing the deal, as well as support from the company's biggest single egg supplier, John Bowler (Agriculture) Ltd. With Corbett's egg industry experience and family history of egg production and packing, this is unlikely to prove a hurdle.
Commenting on the forced sale of a business he has grown-up with and expanded, Michael Kent, now chief executive of Noble Foods, told the Ranger that naturally he was very emotional about the sale.
"My mother and father, Margaret and Clifford, started the business in 1949 with 50 chickens given to them as a wedding present," said Mr Kent. "In 1984 when they decided to retire I took over a rearing, laying, egg packing and feed milling business.
"Over the last 24 years I have shed tears, shared huge joy and great relationships with all the people in the company who with me built a cracking good business supplying the best retailers.
"The Competition Commission has insisted we are too strong for the retailers and that selling Stonegate was the only option we had," went on Mr Kent. "The enquiry has been going on for around 18 months and has proved hugely time-consuming and disturbing for the staff and we now look forward to completing the sale of Stonegate to secure a good future for all those I have loved. We can then concentrate our full efforts on running Noble Foods and ensuring it remains the UK's leading egg marketing company."
