Centerview is a US-based private equity and advisory operation specialising in consumer goods companies and it’s being retained by companies all over the place who are convinced that stock market values don’t reflect the value of the other companies they’d like to acquire.
Set up by former Gillette boss Jim Kilts, who then became a v-p of Procter & Gamble when P&G bought Gillette in 2005, Centerview helped to advise Kraft in its takeover of Cadbury and is now reported to be advising the Campbell Soup Company on a £1.5bn bid for private equity-owned United Biscuits, maker of Jaffa Cakes and Twiglets.
The world’s big companies, those of which have survived the recession anyway, are sitting on mountains of cash as the credit crunch gave them the opportunity to slash costs, dividends to shareholders and, in many cases, their tax bills as they discovered losses that hadn’t occurred to them before the world’s financial system took a powder.
Unlike most investors, who are still worried by national deficits all over the place, they think companies are cheap and anyone in the fmcg sector looking to grow a bit bigger will be giving Jim Kilts and his colleagues a ring.
UB, the creation of one of Margaret Thatcher’s favourite businessmen Sir Hector Laing, fell from grace in the 1990s and is now owned by private equity firms Blackstone and PAI Partners. But they lumbered it with debt of £1.2bn which more or less equals its annual sales.
So a stock market exit route doesn’t look too likely.
But a sale engineered by Centerview does.