BC Partners and Blackstone Group are considering whether to improve their €2.5bn (US$3.12bn) joint offer for the UK frozen food producer Iglo Group.
Permira, the fellow private equity firm that owns Iglo Group, last week rejected the offer from BC Partners and Blackstone. Permira this year appointed Credit Suisse as adviser on a sale process for Iglo.
Athough BC Partners and Blackstone could make an improved offer, Permira is working on expanding the frozen food business.
Credit Suisse is also considering gearing up Iglo with new debt. Iglo has €1.4bn of net debt, a multiple of around four times the company’s earnings before interest, tax, depreciation and amortization (EBITDA) for last year.
BC Partners and Blackstone had planned to increase Iglo’s debt to a multiple of about six times EBITDA.
Permira plans to use much of the extra debt to pay dividends to the owners, with the remaining funds used to finance expansion. The expansion could entail bidding for certain assets of rival frozen food group Findus, according to a report in the Financial Times.