Cooks sells assets six months after listing

Just six months after listing on the stock exchange, Cooks Food Group is to become a shell company, after agreeing to sell its business assets.

The chutney and sauce supplier was formed out of the amalgamation of three small food businesses and planned to become a player through a series of ambitious acquisitions.

It was due to buy the Diamond pasta and DYC vinegar brands from Goodman Fielder by mid-year but was struggling to raise the necessary $12 million.

The deal announced to the NZX yesterday will see Australasian food company Hutchinsons buy Cooks' assets for $4 million and take over the purchase of the Goodman Fielder brands.

Hutchinsons is a subsidiary of Food Holdings Pty, a large food group which owns brands such as Sunbeam dried fruit, Trident and Ryvita.

Cooks owns the Cotterill & Rouse and Murdochs brands. It recently sold the Sahara and Olive Grove falafel mix and dip brands. Cooks chairman Keith Jackson is a former chief executive of Tegel Foods. His family interests are the major shareholder of the company with 58 per cent.

He said the Hutchinsons deal left Cooks debt-free and able to look for other acquisitions in the food industry. "We thought this opportunity was the most appropriate thing in this market."

Cooks did a back-door listing on the NZAX in October, right at the peak of the credit crisis. Jackson denied the company was credit-crunched: "It didn't actually get to that."

However, he conceded a share placement plan to raise $1.65 million following the float had a "reasonably low redemption rate".

"That's the environment at the moment. We totally understand that everyone is being cautious."

Michael Bracka, chief executive of Food Holdings, said the deal was a good opportunity for the company to pick up some well-established brands that fitted its business model.

Food Holdings was on a growth path. "Our group has made 10 acquisitions over the last three years, so we are a strong-branded, growth-oriented business."

Cooks shareholders will be asked to approve the deal at a special meeting to be held next month.