Bakkavor has turned down two takeover bids from fellow private-label manufacturer Greencore.
Ireland-based Greencore today (14 March) revealed it had tabled the offers for Bakkavor in the last fortnight.
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The most recent bid, put forward on 7 March, was a mix of cash and shares and valued Bakkavor at £1.14bn ($1.47bn).
Under the terms of the offer, Greencore shareholders would own around 59.8% of the new company, with Bakkavor investors holding the remainder.
Greencore said bringing the two own-label suppliers together would create “a leading UK convenience-food business”.
The combined group would have “a diverse product offering, strong commercial relationships and market-leading capabilities in attractive segments across the UK convenience food landscape”, it added.
Just Food has approached Bakkavor for comment. Shares in the publicly-listed business were up 18.54% on the day at 179p by 14:58 GMT.
Greencore said its second offer for Bakkavor implied a valuation of its target at 189p a share, including a “final dividend” that was part of the bid.
The company said the offer represented a 25% premium to Bakkavor’s closing share price yesterday and a 32% premium to the group’s three-month, volume-weighted, average share price.
UK-based Bakkavor makes products including ready meals and desserts for customers including Tesco.
In 2024, the company generated more than 80% of its £2.29bn underlying revenue in the UK but it also does business – and has factories – in the US and China.
Greencore, also listed in London, supplies chilled, frozen and ambient food from 16 factories in the UK. The company’s customers take in major UK grocers including Tesco, Sainsbury’s and Asda. In the group’s last full financial year, it took in £1.81bn in revenue.
In 2018, Greencore announced its exit from the US after a decade in the market, selling its business there to an affiliate of Hearthside Food Solutions for $1.07bn.
Greencore said the business created through a takeover of Bakkavor “would have enhanced capabilities across a complementary set of categories, facilitating greater innovation and benefiting both customers and consumers”.
The company added: “There is potential for substantial synergies resulting from a combination of the two businesses, further enhancing growth and value creation for Bakkavor and Greencore shareholders.
“Greencore will continue to evaluate all strategic opportunities, including Bakkavor. There can be no certainty that a firm offer will be made.”
Asked by Just Food if Greencore would make a third bid, the company declined to comment. However, the group pointed to its statement in which it said it believes a combination of the businesses is “a highly compelling value creation opportunity for both Bakkavor and Greencore shareholders”.
Shares in Greencore were down 1.37% at 187.8p at 15:18 GMT.
