United Biscuits

United Biscuits

1. Introduction

United biscuits were founded in 1948 with the merger of two Scottish

family businesses, these were McVities and the Price and McFarlane

Lang group. It was developed furthermore when they acquired Crawford’s

Biscuits and MacDonald’s Biscuits. More recently in 2000, United

Biscuits was bought by Finalrealm who were a consortium of investors

and the company reverted to a private company status.

2. Ownership

In 2000 United Biscuits were bought by a consortium of four

businesses, these four businesses own different percentages in the

company which is dictated by the amount of money which they invested.

The four businesses were Cinven who own 30%, PAI Partners who also own

30%, Nabisco who own 25% and finally MidOcean Partners who own 15%.

United Biscuits were reverted to being a private limited company, this

is unusual because private companies tend to be smaller than public

companies and often are family businesses. To be a private company

there must be at least two shareholders, which United Biscuits have

two more than the minimum. Shares in privately owned companies cannot

be traded on the Stock Exchange and often shares can only be bought

with the permission from the board of directors. The board of

directors is a group of officials whose job it is to protect the

shareholders’ interests, they also choose the managing director who

looks after the daily running of the company.

With private limited companies the shareholders choose the board of

directors, who then choose the management, this is done at an annual

shareholders meeting. Companies that are private have limited

liabilities and this may make them more attractive to stakeholders in

the company because they are only liable for their share value. Shares

are a good way of generating capitol for new ventures because they can

release shares for a certain amount and depending on how many they

sell they will have an instant rise in capitol. There are only a few

disadvantages in comparison to an unlimited liability business, they

have to share the profits out between the shareholders and decisions

can’t be made quickly, they also cost more to set up.

United Biscuits could become a public limited company, and to do this

they would have to float their stocks on the Stock Exchange.

One of the main benefits of doing this is that large amounts of

capital can be raised very quickly, to every “up-side” there must be a

“down-side” and this is that the control of the business can be lost

if large amounts of shares are bought because this would possibly

result in a takeover.

To become a public company the directors must apply to the Stock