According to Sky News reports yesterday (September 14), the new owner of one of Britain’s biggest fuel networks is plotting a ‘rescue bid’ for Palmer & Harvey.
Sky said it had learnt that Brookfield Business Partners, which this week completed a takeover of the road-fuel supplier Greenergy, is ‘among a number of parties’ which have tabled offers for P&H in recent days.
A turnaround unit of Carlyle, the private equity giant; and Sainsbury’s, had also registered a bid, ‘according to insiders’ Sky said.
The deadline for bids comes as P&H attempts to recruit new investors to help thrash out a long-term agreement with two of the world’s biggest tobacco manufacturers (JTI and Imperial Brands.
Brookfield’s interest in P&H reflected an interest in exploiting Greenergy’s vast distribution network and expertise, Sky said.
Greenergy, which describes itself as the UK’s only national fuel supplier, already delivers to supermarkets and independent forecourt operators across the country.
A P&H spokesman told Wholesale News: “The process of exploring our options is progressing well. Having received expressions of interest from a number of parties, we are confident of a successful outcome.”
Molly Johnson-Jones, senior retail analyst at GlobalData, commented: “The acquisition makes sense for Brookfield. However, for Palmer & Harvey it could be a more risky proposition as a private equity acquisition will not necessarily take a long-term view or have the longevity of the business at heart; return on investment is prioritised.
”For the wholesaling industry the disruption that Tesco-Booker will bring makes rescuing P&H even more important for the smaller players in order to maintain a strong, competitive market which is not dominated by one behemoth.
”Sainsbury’s acquiring P&H would be preferable for the market, as it would challenge the monopoly of Tesco-Booker, but the struggling P&H may require more capital investment than Sainsbury’s is able to give.
”It’s clear that P&H needs a partner to step in and help them to survive in the short term, but a private equity partner may not solve the companies problems over the long term.’’