Kellogg and Weetabix Wage Battle For Dorset

Three of the titans of Britain's breakfast tables are waging a battle to win control of the privately-owned Dorset Cereals.

Sky News understands that Jordans, which is owned by Associated British Foods (LSE: ABF.L - news) (ABF), Kellogg (Frankfurt: KEL.F - news) and Weetabix have all tabled offers to buy Dorset, which is likely to fetch well over £50m.

The trio are among around a handful of bidders vying to acquire Dorset, with a number of private equity firms also in the running.

Dorset is owned by Wellness Foods, a company backed by the Irish racing tycoons John Magnier and JP McManus through Lydian Capital, a private investment vehicle.

Wellness also owns Rose Honey, which it explored selling last year.

Weetabix's presence in the auction raises the prospect of another prominent British food brand falling into Chinese ownership.

A majority stake in the company was bought by Bright Food in 2011, with the private equity firm Lion Capital retaining a large minority stake.

Last month, it unveiled plans for a variant of Weetabix with the distinctive flavour of green tea in an attempt to win favour in the Chinese market.

It faces stiff competition for Dorset, however, with both Kellogg and Jordan's also trying to buy the brand.

Between them, the three companies account for a major share of the UK's £1.2bn-a-year breakfast cereal market.

The auction of Dorset is modest in size but comes at a time when many multinational food companies are accelerating the divestment of unwanted brands.

Unilever (NYSE: UL - news) is trying to offload Slimfast and Ragu, which it continues to own outside the UK, while a controlling stake in Hovis was recently sold to a specialist in in the transformation of underperforming brands.

The parties involved in the Dorset sale, which is being handled by bankers at Rothschild, declined to comment.