Boparan swallows poison pill to win Northern

By Rupert Steiner for the Daily Mail
Updated: 03:45 EDT, 11 February 2011

Chicken magnate Ranjit Boparan has been forced to accept a slew of concessions in his pursuit of Northern Foods, new papers show.

Ranjit Boparan: A key barrier to his bid was Northern's £142m pension black hole

The entrepreneur, who gatecrashed an agreed all-share merger between the Goodfella's pizza maker and sandwich maker Greencore, will be prevented from breaking up the group if successful with his £342m all-cash offer.

The poison pill was revealed in a 'deed of agreement' within the deal prospectus of Northern, which also owns the Fox's biscuits brand and is Britain's biggest maker of Christmas puddings.

It stipulates that the guardians of the pension scheme have to give their consent for any disposals of size at Northern (down 0.25p to 75.25p).

It said Boparan, a former butcher who made a £270m fortune supplying poultry to Tesco and Waitrose, will need to seek 'Pension Trustee consent as to the disposal of any assets of the Northern Foods Group where the proceeds are greater than £20m'.

One of the key barriers to his bid was the £142m pension black hole that Northern had amassed since it started life as Northern Dairies in 1942.

Greencore had committed to deal with the deficit by way of extra annual payments of £15m.

The document shows that Boparan, who started his chicken processing empire Boparan Holdings in 1993, has matched the £15m figure but that trustees added a number of other conditions because his debt-laden bid was deemed riskier than Greencore's merger.

The entrepreneur, who also owns the Harry Ramsden's chain of fish shops, has also agreed to forfeit his right to any dividend until 2015.

The document said he had agreed 'to a restriction on the payment of dividends from Boparan Holdings for a period of three years'. Elsewhere it said that both parties had agreed to stump up a £1.8m penalty, known as a break fee, if either side walked away from the deal.

Former Northern chief executive Stefan Barden will also receive a redundancy payment of £57,000. He was not given a role within the new group and had left to join rival Brakes.

Boparan, who is known as the 'chicken king of Birmingham', also owns the Buxted chicken brand and employs more than 5,000 people across 13 factories in Britain, Holland and America. He has already built up a 6.6% stake in Northern.

His Two Sisters poultry empire also supplies Tesco and Kentucky Fried Chicken.