Rumors had been making rounds that UK-based United Biscuits— the manufacturer of the famous McVitie’s and Twiglets brands of biscuits— is an acquisition target for Kellogg Company (K), after Sky News reported the possibility on Wednesday. However, Reuters quashed the rumors only a few hours ago.
Sky News reported that Kellogg has approached investment bankers from Barclays to analyze a $3.37 billion (GBP 2 billion) offer to buy United Biscuits. United Biscuits was reported to have consulted Centerview Partners to assist the English company through a sale or a market float.
Blackstone LP (BX) and PAI Partners, the private equity firms that own United Biscuits, announced last month that the biscuit manufacturer is considering going for an initial public offering (IPO), an option seen as more viable than the sale of the business if the price tag is lower than $2 billion.
Kellogg’s cereal business, the main revenue driver for the company, has been under pressure, with second-quarter revenues from the segment declining 5% year-over-year. An acquisition of United Biscuits is a viable option for Kellogg, to strengthen its cookies and crackers segment, and make up for the dropping revenues of the core business.
Kellogg shares closed up 2.25% today; after the Reuters story, however, the stock dropped 0.16% in after-market trade.