Jun 15, 2011

UK poultry set for takeover action

The poultry sector in the UK is ripe for a series of takeovers and consolidation in the long term, as companies with cash reserves look for investments, market analysts at Plimsoll said.

As a result of the current economic climate the report says that there are too many companies chasing too little markets, with many executives looking to leave businesses and those with cash reserves stuck with money in the bank earning almost nothing.

Report author David Pattison believes up to one in seven companies could be taken over if firms start deploying their cash reserves.

“The UK poultry market is still widely regarded as one of the UK’s most fragmented sectors. In our report we analysed 561 companies with a turnover of over EUR1 million (US$1.4 million) per annum and have picked out 117 that are primed to be taken over,” Pattison said.

“Buying one of these businesses represents a massive opportunity for someone to enhance their share of the market. Either way, the market is set for a wave of takeovers in the next months,” he said.

“One company has a EUR91 million (US$131 million) cash pot. These companies are now in the position to buy up large chunks of market share at rock bottom prices and make that money work for them.”