The queue of potential bidders for catering giant Compass is lengthening after a top US private equity firm began working on a takeover proposal, it was claimed.
Texas Pacific Group (TPG) was yesterday understood to be interested in bidding for Compass, which has become vulnerable since shocking the City with a string of profits warnings and suffering major management upheaval this year.
An offer from TPG would create headlines since it owns airline catering firm Gate Gourmet which was hit by industrial action this summer and caused a major disruption to the operations of British Airways.
Speculation that TPG is interested comes hot on the heels of reports that another US private equity firm - Clayton, Dubilier & Rice (CDR) - has asked bankers for advice on a potential bid.
Analysts are sceptical that a private equity bid will emerge due to the pressure on margins at the core business of Compass and a £428 million pensions deficit.
Yesterday's report follows a tough period for Compass, which has rocked the City with three profits warnings over the past year and is looking for a new chief executive after boss Mike Bailey announced he is to step down.
The group's woes deepened this month when it suspended the chief executive of its operations in the UK, Republic of Ireland, Middle East and Africa, as it investigates how United Nations contracts were awarded.
Compass supplies lunchtime meals to about 2,500 schools and provides food to corporate clients.