Chris Wheal(Press Association) Troubled wholesaler Palmer & Harvey (P&H) is closing in on a financial lifeline after entering exclusive takeover talks with the Carlyle Group.
The 90-year-old firm said it would hand the US private equity fund a controlling stake in exchange for significant capital investment, but the deal was subject to due diligence.
P&H, the UK’s biggest supplier of cigarettes, employs 4,000 people and provides alcohol, groceries and frozen food to 90,000 retail accounts, including Tesco.
The privately owned group has been working with stakeholders Imperial Brands and Japan Tobacco International as it searches for relief from thin profit margins and a substantial debt burden.
In a statement, P&H said the potential deal would provide a “strong financial platform”.
It added: “The company is grateful to all parties for the time invested in exploring the opportunities presented.”
The move comes amid a period of consolidation within the grocery sector, with Tesco agreeing a £3.7bn deal in January to merge with food wholesaler Booker.
However, the Competition & Markets Authority (CMA) announced in July that it would launch an in-depth investigation into the merger amid concerns that competition could be harmed in more than 350 local areas where there is an overlap between Tesco shops and Booker “symbol stores”.