Wiseman sets sights on further expansion

Published on Sunday 24 February 2002 00:00

ROBERT Wiseman Dairies yesterday left the door open on whether to table a multimillion pound bid for rival Express Dairies.

The East Kilbride company said Friday’s news that Express had ended discussions with an unnamed third party - believed to have been Danish group Arla Foods - over a 35p-a-share bid had changed nothing.

Leicestershire-based Express remained one of a number of opportunities for Wiseman, a spokesperson said. He said: "The news doesn’t put any pressure on us whatsoever. Our strategy is consistent. It is to go for healthy organic growth and also to look for acquisitions where it fits the strategy. We keep an open mind on any acquisition."

Robert Wiseman and other would-be suitors are understood to be deterred by the 200m worth of debt that Express is thought to be carrying - a sum which would swell the cost of a bid to up to 300m.

In addition, Express has a 30% share of the daily doorstep delivery market, which is currently declining at around 10% each year.

Industry watchers have questioned the logic behind Wiseman launching a bid, citing poor synergies between the two companies.

Despite this, an offer remains a possibility. Speaking exclusively to Scotland on Sunday earlier this month, managing director Robert Wiseman said: "We’re sitting back and waiting for new developments. The company has grown rapidly over the past few years, and our aim is to maintain this pace of development as we move forward.

"In the future, the industry will have to consolidate and we’re in the right position to go for it."

It is thought that Arla, which owns Lurpak butter, pulled out of the race for Express over concerns regarding worsening market conditions and a possible competition inquiry after performing due diligence.

In another twist, campaign group Farmers For Action is also considering a bid for Express, led by chairman David Handley. He is reported to still be in the frame to make an offer.

The UK dairy market is dominated by Dairy Crest, Express, Wiseman and Arla, and is fast consolidating as the four attempt to compete against supermarket chains.

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