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Chinese private equity firm Hony Capital Ltd mulls possible offer for United Biscuits Holdings Ltd- sources

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January 15
3:25 AM 2014

Sources told Bloomberg that China-based Hony Capital Ltd is studying a possible offer for United Biscuits Holdings Ltd which could involve working with a corporate buyer, Bloomberg reported. A private equity firm based in Beijing, Hony Capital manages over $6.8 billion.

The people who spoke on the condition of anonymity because the talks are confidential said Hony already has had informal discussions with Blackstone Group and PAI Partners to purchase the Digestive biscuits maker. The sources said it is not yet certain if Hony will give an offer. They did not disclose the name of the possible partner, the report said.

Bloomberg data revealed that United Biscuits was bought by Blackstone and PAI in 2006 for a price tag of £1.6 billion or $2.6 billion. The funds were not able divest the entire company to Shanghai's largest food and dairy firm, Bright Food Group Co, in 2010 and came to a decision to break up the snacks and biscuits operations in order to pave the way for an exit, the report said.

Two people knowledgeable about the matter told Bloomberg that there are no forthcoming plans to divest the business even if PAI and Blackstone have obtained interest for United Biscuits in the past. A person knowledgeable about the situation also told Bloomberg that banks like JPMorgan Chase & Co are working with the buyout firms as they evaluate their choices.

According to people familiar with the deal, the owners of United Biscuits divested the KP snacks unit last year in a deal worth over £400 million.

Headquartered in Hayes, England, United Biscuits was formed in 1948 when McVitie & Price merged with MacFarlane Lang.

Legend Holdings Ltd, the parent firm of computer manufacturer Lenovo Group Ltd, established Hony in 2003. Led by Chief Executive Officer John Zhao, the private equity company is known for linking with Chinese firms to make acquisitions, the report said.

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