Bids close on Monday for Fonterra's Tip Top ice cream business but the sale process has been anything but smooth, according to sources close to the company.
It's understood potential buyers are not impressed by the state of the manufacturing plant, while due diligence has been complicated by Tip Top's integration with Fonterra, including the supply chain.
"It's pretty hardwired into the rest of Fonterra," an insider told Continuous Disclosure.
"There's quite a separation process that has to be done around IT systems, around warehouses, and they don't really have a finance team, HR team, or admin team. All those things need to be put back into it."
That's creating a headache for some would-be buyers. But also, it's likely the manufacturing will have to move from the current site at Mt Wellington in Auckland, meaning trade buyers with existing processing capability are the most likely bidders at a price acceptable for Fonterra.