Premier in talks over potential £250m sale of meat-free Quorn

Premier Foods, the group behind popular brands such as Hovis and Mr Kipling, yesterday confirmed it was in advanced talks with two parties over the sale of its meat-free food range Quorn.

Its statement to the stock market followed speculation that named Swiss consumer giant Nestl as a frontrunner in the auction, which could value Quorn at more than 200 million.

Premier has not identified the potential suitors but said it was in advanced discussions with two parties after receiving initial approaches from multi-national food groups and private equity firms. It stressed there was no guarantee that a sale of its meat-free business will take place.

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However, Premier has already said it is open minded about disposals as it looks to alleviate the 1.4 billion debt pile built up following an acquisition spree that included Hovis owner RHM and Campbell's Soup in the UK and Ireland.

Quorn, purchased for 172m from Marlow Foods in 2005, is said to be valued at between 200m and 250m. It is understood to be one of a raft of brands potentially up for sale as part of the debt reduction plan.

Premier received an approach for the Mr Kipling cake business last year and there has been speculation its Hovis bread brand could go up for sale.

The first Quorn product was launched in 1985 using a specially developed protein-based ingredient called mycoprotein, and it has since become a popular meat substitute for vegetarians.

Premier released a trading update towards the end of October which revealed a 4.6 per cent rise in branded sales volumes in the three months to September.

However, it warned of an "increasingly challenging environment" with grocery market volumes down 3.2 per cent.

Chief executive Robert Schofield said at the time full-year progress would be dependent on Christmas trading.