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CPB - Acquisition target?

LONDON (Dow Jones)--Premier Foods PLC (PFD.LN) confirmed Monday that it is in talks to buy the U.K. operations of Campbell Soup Co (CPB).

The U.K. food producer said in a statement that it is in "non-exclusive" discussions to acquire Campbell's U.K. and Ireland business. "There can be no assurance that these discussions will lead to a transaction," the company added.

Speculation has been rife that Premier was lining up a deal with Campbell since it said in May that it was evaluating acquisition opportunities.

U.S.-based Campbell said earlier this year that it was exploring options for its operations in the U.K. and Ireland - which includes the brands Homepride, Oxo and Batchelors.

Premier Foods already owns brands such as Branston, Ambrosia and Quorn and has a stated strategy of growing its branded foods division.

The news wasn't unexpected and by 1525 GMT Premier Foods' shares were flat at 311.5 pence in a slightly higher London market.

Shore Capital's Clive Black said he wasn't surprised, and that "the speculation has been around for months." He said the timing of the statement was a little puzzling, but probably down to legal or regulatory requirements.

Black added that it will be interesting to see if Premier now confirms its interest in buying the U.K. operations of United Biscuits - another long-rumored acquisition target.

Private equity-owned United Biscuits announced earlier Monday that it will sell its Spanish and Portuguese businesses to U.S. food giant Kraft (KFT).

United Biscuits' remaining operations - in the U.K. and Northern Europe - represent about 82% of the company's total revenue.