Hicks, Muse, Tate & Furst (HMTF), the private equity firm whose principal offices are in Dallas and London, sold its remaining 20.4 percent interest in listed UK food business Premier Foods last Friday (October 15) for £110 million (€159 million; $198 million), according to a statement it made to the London Stock Exchange.
The announcement said HMTF Premier Limited, the holding vehicle for HMTF’s investment, has sold 49,934,781 shares at 220 pence per share via an accelerated book-build led by Merrill Lynch International and JP Morgan Chase & Co.
The latest move completes HMTF’s exit from the deal, which began when Premier Foods joined the London list in July 2004 at 215 pence per share, valuing the company at £527 million. At the time, HMTF sold £232 million worth of shares. Following this it had a 30 percent stake, before reducing it further to just over 20 percent when an over-allotment option was exercised.
The sale required an agreement to be reached with Premier’s banks, due to the existence of a 180-day lock-up period that took effect at the time of the IPO. The latest sale also saw the Premier management team offload 7.3 million shares.
The size of the share sale – nearly a quarter of the company’s shares changed hands in total – saw the company’s share price close 3.25 pence a share (1.41 percent) down by close of trading on Friday. The share sale was three times oversubscribed.
HMTF declined to reveal details of the return it has made from the transaction.
Birmingham-based Premier Foods was one of two companies spun out of Hillsdown Holdings, the UK listed food group, after HMTF acquired Hillsdown in 1999 in an £822 million buyout. Premier’s brands include Branston pickles and Typhoo tea. The firm made an operating profit of £31.2 million on sales of £425.8 million in the year to July 3 2004.
In July, HMTF announced a change to its compensation structure to ensure that European team members would reportedly get around 93 percent of the profits from the new Europe II fund. Previously, investment team members shared carry from all investments, both in the US and Europe.