Mitsubishi pauses Princes sale process after bids come up GBP 200 million short

Mitsubishi has paused its sale of Princes, but it remains determined to unload the Liverpool, United Kingdom-based food and beverage group it acquired in 1989.

The Japanese conglomerate put Princes on the market earlier this year after its sales declined from GBP 1.56 billion (USD 2 billion, EUR 1.83 billion) in 2021 to GBP 1.44 billion (USD 1.85 billion, EUR 1.68 billion) for the 12 months ending in March 2022, according to The Grocer. Sales dropped even further for the 12 months ending in March 2023 due to a post-Covid drop in consumption exacerbated by an ongoing global inflationary cycle. 

But bids for Princes came in no higher than GBP 400 million (USD 513 million, EUR 468 million), much lower than Mitsubishi’s own valuation of the holding at GBP 600 million (USD 770 million, EUR 702 million), The Grocer reported, adding that the sale process has now been put on hold until later in 2023 as the company waits for recently implemented price increases to be reflected in its balance sheet.

Private equity firms including Valeo, a fund run by Bain Capital, and Loanstar, One Rock, and TPG Inc., explored the acquisition, according to The Grocer. Mitsubishi hired investment bank Houlihan Lokey to run the sale, and it has marketed Princes as a means of entry into the U.K. food and beverage sector.

German private equity firm Aurelius also showed interest, according to Sky News.

But the sale ran into financial headwinds, with high interest rates and an uncertain economic climate making banks less willing to lend the funds needed by to private equity funds to undertake a leveraged buyout, according to The Grocer.

The company recently finalized a GBP 150 million (USD 192.6 million, EUR 175.6 million) investment in its processing U.K. facilities in Cardiff, Erith, and Long Sutton, and is committed to further infrastructure spending, it told The Grocer.

About 20 percent of Princes total sales are seafood-related, including canned tuna and salmon and tinned seafood. The company operates a tuna-processing plant in Mauritius under subsidiary Princes Tuna Mauritius,  reported it has achieved the milestone of having 100 percent of all its Princes’ branded tuna identified as responsibly sourced, meaning it is from a fishery that is certified by the Marine Stewardship Council, engaged in a fishery improvement project working towards MSC certification, or from verified fish-aggregating device-free or pole-and-line sources.

PTM enlarged its tuna-processing operation in the Indian Ocean region in 2021. Also in 2021, Princes also reached its goal of reducing its Indian Ocean yellowfin tuna sourcing by 50 percent on 2017 levels, a year ahead of its 2022 deadline, to support the long-term sustainability of the stock there.

And PTM partnered with Mauritius-based bio-plant venture Energie des Mascareignes (EDM) to reduce its CO2 emissions by 8,650 MT per year at the company’s tuna-processing facility in the country, at an estimated cost of EUR 12 million (USD 12.9 million).

Photo courtesy of Princes