Kellogg among companies considering bid for United Biscuits' snacks unit, sources say; unit valued at £500M

PARIS and CHICAGO , September 7, 2012 () – Companies including Kellogg Co. and KKR & Co. are considering a bid for United Biscuits’ snacks unit, people with knowledge of the matter said.

The KP Snacks unit, spun off from United Biscuits by owners Blackstone Group LP and PAI Partners this year, is valued at about 500 million pounds ($796 million), said the people, who asked not to be identified because the process is private. Documents on the sale are scheduled to be sent next week, the people said.

Blackstone and PAI, which is based in Paris, bought United Biscuits for about 1.6 billion pounds in 2006. They failed in 2010 to sell the whole company to Bright Food Group Co., Shanghai’s biggest food and dairy company, and decided to split the snacks and biscuits businesses to facilitate an exit.

United Biscuits was created in 1948 from the merger of two Scottish companies, McVitie & Price and MacFarlane Lang. It competes with food companies including U.S. snacks makers Snyder’s-Lance Inc. and ConAgra Foods Inc., and its brands are sold in more than 100 countries.

Other potential bidders for the unit include Germany’s Intersnack Knabber-Geback GmbH & Co. and private equity firms including Permira Advisers LLP, Warburg Pincus LLC, Clayton Dubilier & Rice LLC and Lion Capital LLP, the people said.

A Permira official declined to comment, as did officials at KKR, Clayton Dubilier, PAI, Blackstone, Lion Capital, Warburg Pincus and Kellogg. Spokespersons for Intersnack weren’t immediately available to comment.

--With assistance from Julie Cruz in Frankfurt, Jacqueline Simmons in Paris and Leslie Patton in Chicago. Editors: Jacqueline Simmons, Chris V. Nicholson

To contact the reporters on this story: Anne-Sylvaine Chassany in London at achassany@bloomberg.net; Jeffrey McCracken in New York at jmccracken3@bloomberg.net

To contact the editor responsible for this story: Jacqueline Simmons at jackiem@bloomberg.net

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