Crunch time for British cereals firm

A CHINESE state-backed food company is thought to have renewed its hunger for British brands by holding talks to buy cereal business Weetabix.

Shanghai firm Bright Food has been in talks with Lion Capital, Weetabix’s private equity owner, for several weeks, according to a weekend newspaper report.

In 2010, Bright Food considered a £2 billion deal to buy United Biscuits, the company behind Hula Hoops and Jaffa Cakes, but the talks fell through.

Weetabix dates back to 1932 and was family owned until it was bought by Texan private equity firm, Hicks Muse Tate & Furst, in 2004 for £642 million.

A restructuring of the private equity business saw its European arm break away, creating Lion Capital.

It is thought Bright has placed a value of around £1bn on the Northamptonshire-based business, which sells in 80 countries, employs some 2,000 people and generates annual sales of £423m.

In 2010, Weetabix accounted for 7 per cent of the country’s total cereal sales with annual revenues in excess of £100m. Other brands in its portfolio include Alpen, Ready brek and Oatibix.

Any sale could revive the debate about UK businesses falling prey to overseas buyers. US food giant Kraft’s swoop on Cadbury has caused controversy.