November 26, 2012

New Hope and Blackstone about to conclude bids for Inghams


Blackstone Group LP and Chinese agribusiness firm, New Hope Group, are close to concluding bids for Australia's largest poultry producer, Inghams Enterprises.


Second-round bids are due by mid-December in the deal, which could be the largest private equity buyout in Asia this year, the sources said.


Inghams Enterprises, which owns the Ingham Chicken brand, was founded in 1918 by Walter Ingham and employs 9,000 people across Australia and New Zealand. Bob Ingham, who turned 81 this year, decided to sell the business he inherited in 1953 from his father.


Australian food manufacturers have been highly sought after by private equity and other Asian buyers in the past two years due to resilient sales and steady cash flows, which have withstood a slowing economy.


New Hope Group Co Ltd is one of China's largest suppliers of meat, eggs and dairy products, with annual sales of US$8.8 billion, according to its website.


It operates agribusinesses in China and has expanded into the Philippines, Bangladesh, Indonesia and Vietnam and owns more than 10 animal feed plants and poultry farms in Southeast Asia.


Blackstone, the world's largest alternative asset manager, is being advised by UK bank Barclays, according to three banking sources with knowledge of the situation.


If Blackstone were to succeed, it would mark its first buyout deal in Australia, after buying US property investments owned by Australian firms.


Several other private equity funds, including Hong Kong-based Affinity Equity Partners, Bain Capital and KKR & Co , were initially drawn to the auction but did not lodge preliminary offers, sources said.


Thailand's C.P. Foods also placed a preliminary bid, but has now dropped its interest in privately owned Ingham.


"Inghams is working with its financial advisor Investec to manage the sale process and to assess all options for the company. We are not disclosing details regarding bidders at this stage," a spokeswoman for Inghams said.


Inghams' top customers are Australia's supermarket duopoly of Woolworths Ltd and Coles, who have strong market power to pressure suppliers.


An external spokeswoman for Blackstone said the firm declined to comment. A spokesman for New Hope was not immediately available.