Investors remained largely unfazed yesterday by the $3 billion-plus pile of cash Graeme Hart and Burns Philp have to find a home for after the Uncle Toby's snack foods sale.
Shares in the cashed-up food business eased 1 1/2c yesterday to A95.5c with analysts taking a cautious view.
Burns Philp,which is 54 per cent owned by Hart, has sold the Australian arm of its snack foods business to Nestle for A$890 million ($1.1 billion).
Having spun off and listed its Goodman Fielder business, the company is sitting on more than $3 billion in cash.
But despite having been on the hunt for several months, management will not say if it is close to making any new investments.
"It's not a stock for everyone," said Commonwealth Securities senior analyst Grant Saligari. "We just don't know what they're going to buy."
For that reason, he had a "reduce" recommendation on the stock. Credit Suisse also downgraded its recommendation to "underperform" yesterday.
But Saligari said Burns Philp investors were generally in there because they backed Hart and his management team.
Those people probably would not be too concerned about the length of time taken to find a new investment.
Meanwhile, speculation has turned to who will buy Bluebird Foods and for how much.
Under normal circumstances, the acquisitive private equity fund, Pacific Equity Partners (PEP), would be the prime contender.
But it could be ruled out because it bought Griffins this year for nearly $400 million. That business included Eta, which is Bluebird's biggest competitor in New Zealand.
US food giant Pepsico has been tipped as another contender. It has one of the world's biggest salty-snack food businesses in Frito-lay but has never had a presence here.
