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(Campbell article updated with analyst comment on United Biscuit bid.)



) --

Campbell Soup

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may make a $2.3 billion bid for a portion of the U.K.'s

United Biscuits

, according to a report.

According to the Sunday


of London, Campbell Soup is eying the British company's biscuit unit, which makes up about 75% of its business. Campbell Soup is less interested in United Biscuits' snacks segment, reports say.

United Biscuits was bought by private-equity firms

Blackstone Group

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PAI Partners

in 2006.

In July,


reported that the firms were thinking of selling United Biscuits for more than 2 billion pounds.

According to reports, Blackstone and PAI haven't been able to drum up much interest in United Biscuits as a whole. Thus, the private-equity owners have been open to selling off pieces of the company.

Numerous reports said that Campbell has sought out the help of U.S. boutique investment firm Centerview Partners as an advisor in the break-up bid.

Janney Capital Markets analyst Jonathan Feeney told clients in an investor note that news about Campbell's bid is credible, given the company's emphasis on potential acquisitions at its July 12th analyst day meeting. He also cited the "specificity" of the reports -- including the naming of Centerview -- and the company's "ample" balance sheet room.

Feeney believes that an actual deal would be a "modest negative" for Campbell stock, as it would divert attention from its soup business. "First, we believe the shares are undervalued due to Campbell's under-appreciated, ultra-high competitive advantage in the soup business, which we believe will show up via aggressive promotions and volume this soup season and on which we want to see maximum leverage through share repurchase."

Feeney adds that Campbell could more effectively utilize its strong balance sheet with more shareholder friendly moves such as divestitures, a dividend increase or making itself look like an attractive takeover target.

-- Reported by Andrea Tse in New York

--Written by Andrea Tse in New York.

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