By Mark Kleinman, City Editor
Fox's, one of the UK's biggest biscuits brands, is in talks with private equity funds about a joint bid for rival Burton's Foods, the maker of Jammie Dodgers and Wagon Wheels.
Sky News understands that Clayton Dubilier & Rice (CD&R), the US buyout firm, has opened discussions with 2Sisters, the food producer, about a carve-up of Burton's, which has been put up for sale for about £350m.
The two parties have not yet reached a definitive agreement about a joint bid but insiders believe that such an outcome is likely if CD&R emerges as the winning bidder for Burton's.
The potential alliance is being driven by Vindi Banga, a former Unilever executive who is now a senior executive at CD&R, although it is unclear which assets are coveted by Fox's.
Competing bidders in the auction include the private equity arm of the Ontario Teachers' Pension Plan, one of the world's largest pension funds.
A sale of Burton's will entail a change of ownership for another portfolio of prominent UK food brands following the sale several months ago of the snacks division of United Biscuits (UB), which included Hula Hoops and KP Skips among its products.
Burton's is Britain's second-largest biscuits manufacturer by sales, behind UB, which is also owned by two private equity groups, Blackstone and PAI Partners.
As well as Wagon Wheels, Burton's produces Cadbury Biscuits, Lyon's and Maryland cookies.
Based in St Albans, Hertfordshire, Burton's traces its roots back to the mid-1800s when it was founded by George Burton.
It employs more than 2,200 people around the UK in three manufacturing facilities in Llantarnam, Edinburgh and Blackpool, a chocolate refinery in Moreton and a central distribution hub in Liverpool.
Burton's is one of a sizeable number of mid-sized British companies which has been through several phases of private equity ownership.
In 2009, Apollo and CIBC, the Canadian bank, seized control of the company after Duke Street Capital, its previous owner, was forced to surrender control to the biscuit-maker's lenders.
Another private equity group, HM Capital, had bought the company in 2000 from Associated British Foods, owner of the Primark retail chain.
The auction of Burton's will pre-empt that of UB, which is expected to be put up for sale in the next couple of years.
UB, which now consists solely of a biscuits business, owns the McVitie's brand, which includes products such as Jaffa Cakes and Penguin.
CD&R declined to comment.
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