The Turning Point. CPG ,Now moving in the right direction

The following should help the SP. If the price is correct its much more than I expected.

Benetton behind £1.4bn offer for Compass arm

A subsidiary of Benetton, the Italian clothing giant, last week made a £1.4bn bid for the retail food and drink arm of Compass, the troubled catering giant.

It is understood that Autogrill Group, which is 56 per cent owned by Benetton, is the only catering company to have been shortlisted in the auction of Select Service Partner, which is being sold by Compass as part of a restructuring.


Autogrill has 4,200 outlets in 15 countries and employs around 50,000 people

The other bidders are all thought to have been financial buyers, which are unlikely to be able to match the Italian company on price as they will have no operational synergies.

Whitbread, the hotels and leisure group, is understood to have expressed an interest but is not thought to have been included in the six-strong shortlist being draw up by bankers at Citigroup, the advisers to Compass.

Autogrill is one of the largest operators of motorway service stations in Europe and also has operations at airports and other travel outlets in the US. It has 4,200 outlets in 15 countries and employs around 50,000 people.

However, the UK is seen as a glaring gap in its European coverage and the group believes it will be able to substantially improve the quality of food on offer to travellers at the UK's railway stations and motorway service areas.

"These guys are the biggest sellers of coffee in Italy; you don't get to do that unless you do it well," a person familiar with the group said yesterday. "Autogrill claims to be the world's leading supplier of food to people on the move. That is their core business and they do it well."

Despite being majority-owned by the Benetton group, Autogrill is listed on the Milan stock exchange, where it is capitalised at around €3bn (£2bn). Last year the company earned revenues of €3.2bn, two thirds of which were generated outside of Italy.

SSP includes Moto, Compass's motorway service stations, Upper Crust, the railway sandwich shops, Millie's Cookies, the biscuit outlet, and Harry Ramsden's, the fish and chip restaurants.

Compass put the division up for sale in September after a tumultuous year which included a string of profits warnings, the announcement of the departure of the chairman and the chief executive and unwelcome involvement in a corruption scandal linked to catering contracts for the UN.

Compass has been embroiled in the investigation after a subsidiary, Eurest Support Services, was accused of involvement in corrupt buying practices for contracts relating to feeding UN peacekeepers. Compass has asked a law firm to carry out an internal investigation and has dismissed three senior managers.

In November the company announced that its profits had fallen from £645m to £581m after it was obliged to write down assets by £140m in the second half. Roy Gardner, who succeeds Francis Mackay as chairman of Compass next year, is leading the search for a replacement for Mike Bailey, the group chief executive, who said he will step down as soon as a replacement is found.