07/10/2012 15:35 BST

KP Snacks Could Be Sold To Russian-British Equity Firm Pamplona Capital Management

KP Snacks - which makes Hula Hoops, KP Nuts and Skips - could be sold to a Russian-British private equity firm in a £450 million auction, it was reported today.

Pamplona Capital Management has emerged as one of the favourites to win the UK's second-largest branded snack company, which employs 1,500 staff, the Sunday Telegraph said.

Rivals include Permira, CD&R, TDR, CapVest and German family-run Intersnack, which are all expected to submit bids before this Tuesday's offer deadline.

KP Snacks is the junior partner within its parent group, United Biscuits, ultimately owned by private equity firms Blackstone and PAI.

KP accounts for 20% of the total group, which is dominated by biscuit brands, such as Jaffa Cakes and Penguins.

A 2010 sale of the whole of United Biscuits to China's Bright Food fell through, leading to a break-up of the company.

Nick Bunker - former president of Kraft UK, which was the £2 billion Cadbury business - was parachuted in to take over as chief executive.

The high private-equity interest in the auction is based on KP's growth potential, through cost-cutting to increase margins and investment to grow sales, it was reported.

It has several brands thought to be ripe for development, such as Phileas Fogg, Space Raiders and Nik Naks.

KP originally stood for Kenyon Produce. It was founded in 1853 as Kenyon & Son as a producer of confectionery, jam and pickles. By 1891 the company had become Kenyon & Son and Craven Limited.

The company switched to producing roasted and salted hazelnuts in 1948, expanding to peanuts later. These were originally produced for sale in cinemas.

In 1952 the company introduced Hercules Nuts and in 1953 the KP Nuts peanut brand.

The company became part of United Biscuits in 1968.

The snacks part is based on Teesside and in Rotherham, near the UB distribution warehouse.