(Bloomberg) — Bakkavor Group Plc rejected a cash and stock bid from Irish convenience food manufacturer Greencore Group Plc valuing the London-listed firm at £1.14 billion ($1.5 billion).
Greencore offered 85 pence in cash and 0.523 Greencore shares for each Bakkavor share in a revised proposal on March 7, according to a statement Friday. Bakkavor shareholders would also retain the right to receive the final dividend of 4.8 pence per Bakkavor share.
Including the dividend, the bid values Bakkavor at 189 pence per share, representing a 25% premium to Thursday’s closing price. Bakkavor rejected the latest proposal, after already turning down an earlier offer from Greencore on Feb. 27.
Bloomberg News reported earlier Friday that Greencore approached Bakkavor in recent weeks to express interest in a tie-up. Greencore, led by Chief Executive Officer Dalton Philips, said in Friday’s statement that a deal would help build scale by combining complementary businesses and touted the potential synergies from a transaction.
Greencore said it will continue to evaluate all strategic opportunities, including Bakkavor, though there’s no certainty it will proceed with a deal. The company is required to announce by 5 p.m. local time on April 11 whether it’s going to make a firm offer or walk away.
Rothschild & Co. is advising Greencore on the potential transaction.
The two companies have explored tie-ups in past years that failed to lead to a deal, people with knowledge of the matter said. At one point in 2008, Bakkavor held a roughly 11% interest in Greencore, only to sell the stake months later because of the financial market turmoil.
Greencore was founded in 1991 following the privatization of Irish Sugar. The Dublin-headquartered company supplies food including sandwiches, chilled prepared meals and cooking sauces to major supermarkets in the UK as well as travel retail outlets and coffee shops.
Bakkavor provides prepared meals, pizzas, bread and salads to groceries such as Tesco Plc, Mark & Spencer Group Plc and J Sainsbury Plc. The UK accounted for about 85% of the company’s total revenue last year, its website shows. Bakkavor also operates in the US and China.
Any deal would require winning over the Icelandic brothers who founded Bakkavor, Agust and Lydur Gudmundsson, who still own about 50% of the company. Agust retired from the chief executive role in October 2022. Lydur served as CEO from 1986 to 2006 and stayed on as non-executive chairman until 2017.
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