Private equity houses are closing in on the food division of Tomkins, the diversified manufacturing group.
Favourite to succeed is US company Hicks, Muse, Tate and Furst, which is also bidding for United Biscuits. But the company’s own rules limit the stake it can take in each sector, so if the United Biscuits deal goes ahead it would be compelled to drop the Tomkins bid.
Doughty Hanson, Kohlberg Kravis Roberts and CVC Capital Partners are thought to be waiting in the wings. Analysts expect the sale to be worth about £1.5bn.