Doughty Hanson heads shortlist for RHM

Doughty Hanson is thought to be in advanced negotiations to buy RHM from the ailing conglomerate, whose share price has halved since 1998, reports Sunday Business.

Tomkins has also received bids from other private equity firms – Hicks Muse Tate & Furst, Paribas Affaires Industrielles and CVC Capital Partners – who may yet come back with a higher bid.

The £1.2bn offer by Doughty is well below earlier estimates which put the value of RHM – whose brands include Hovis and Mother's Pride bread, Bisto and Mr Kipling cakes – at £1.8bn.

The prospective deal is yet another clear sign that the UK food business has become an attractive target for large, European buyout firms.