Reports: Kellogg, OTPP, Ulker Biskuvi Among Initial Bidders For United Biscuits

(RTTNews) - Cereal maker Kellogg Co. (K), Canadian pension fund Ontario Teachers' Pension Plan or OTPP and Turkish biscuit company Ulker Biskuvi Sanayi AS are among the first round bidders to acquire British snack and cookie maker United Biscuits Holdings Ltd., according to media reports on Monday. The bids reportedly value the company at about 2 billion British pounds or $3.27 billion.

Some of the others in the fray are smaller domestic rival Burton's Biscuit Co., Italian chocolate company Ferrero SpA, Mondelez International, Inc. (MDLZ), Campbell Soup Co. (CPB) Chinese private equity group Hony Capital, and the Philippines-based conglomerate San Miguel Corp. (SMGBY) However, they are yet to put in their bids.

The second-round of bidding is reportedly expected by the middle of October.

OTPP would be looking to acquire United Biscuits in a order to further boost its biscuits portfolio after it had acquired jammy-dodger maker Burton's Biscuits in November. Meanwhile, Campbell has been showing interest in the biscuit side of United Biscuits since 2010.

UK-based United Biscuits, which is owned by private-equity firms Blackstone Group LP and PAI Partners, makes the famous McVitie's Digestives, Mini Cheddars, Jaffa Cakes, Penguin bars, Twiglets, Jacob's Cream Crackers, and Rich Tea Biscuits.

It is Britain's largest biscuit manufacturer and the world's sixth-biggest cookie maker by revenue The company has around a 25 percent share of the U.K. market.

The company was put on the block by its private equity owners a year ago. They are mulling either an outright sale or an initial public offering simultaneously as part of a so-called "dual-track" process.

The company is reportedly working with Goldman Sachs Group, Inc. (GS) and JPMorgan Chase & Co. (JPM) handle an IPO, and Centerview Partners is advising it on its options, which will be finalized by November. The booming equity markets in Europe in 2014 have made a flotation a viable alternative.

The company has been mulling an IPO on the London Stock Exchange since July to exit part of their investment even as bids were being floated for an outright sale. The IPO is seen as the favored option for the company. It was first taken private 15 years ago.

The private equity owners bought United Biscuits for 1.6 billion pounds in 2006. They were in final stages of a 2.5 billion outright sale of the company to China'sBright Foods in 2010. However, the sale broke down reportedly over pension liabilities at United Biscuits.

United Biscuits then split itself into two units - salty snacks and sweet biscuits in order to make it easy to attract bids for the smaller business. The salty snacks business was then sold to Germany's Intersnack.