Shares in food group IAWS fell 20 cent to €12.14 on the Irish Stock Exchange yesterday. This followed confirmation that Lion Capital, a British-based private equity group, had bought a 32 per cent stake in Swiss bakery Hiestand, a company in which IAWS also holds a 32 per cent stake.

Lion Capital, which holds interests in Weetabix, Kettle Foods and Orangina, is understood to have bought the stake from Focus Capital Investors, a US-based fund, in a deal that analysts said was a reminder that private equity groups may come "knocking on the door" of Irish food companies.

IAWS, which owns Cuisine de France and has a joint venture interest in Tim Horton's doughnuts, made no comment on the transaction except to say that its own holding in the Hiestand remains unchanged.

A stake of 32 per cent is the maximum allowed under Swiss company law without triggering a full bid for the company.

The price at which the 170,000 shares changed hands was not disclosed, but analysts at NCB Stockbrokers said Lion was likely to have acquired the stock at a significant discount to the market price.

In a note to shareholders, NCB said the sale highlighted the value of consumer companies that display strong growth and pricing power in sectors that have relatively high barriers to entry.

"It also obviously highlights the fact that many private equity firms still have significant funds at their disposal, notwithstanding the impact of the credit crunch."