Flurry of interest in Tegel

Food giant HJ Heinz will not be short of prospective buyers if it decides to sell New Zealand's biggest poultry processor, Tegel Foods.

Investment bankers report a flurry of interest from candidates - including overseas private equity funds - after speculation last month that Tegel could go on the block.

However, the bankers contacted by the Business Herald can detect no signs of the United States owner moving towards a sale.

The speculation that a sale was possible came after chief executive William Johnson singled Tegel out as an under-performer after Heinz's global quarterly profit announcement.

It is also seen as a poor fit with the global Heinz businesses and has long been seen as a candidate for divestment, with the company reported to have gone a long way down that path in 1998.

"But it was such a good business and the management so highly thought of that they kept it," one dealmaker told the Business Herald last month.

Heinz Australia and New Zealand chief executive Peter Lucas last month acknowledged a downturn in Tegel's performance, but denied plans existed to divest.

Johnson had told a conference call that the company was assessing Tegel Foods and its European seafood business.

"Fundamentally, our international businesses are performing well, with the exception of those two businesses," he said.
"We have an issue with those businesses, but [you] can't draw any conclusion from that, other than we're working to address those issues."

Tegel has 1900 staff and processing plants in Taranaki, Christchurch and Henderson, in West Auckland.