Greencore has increased its bid for London-listed rival Bakkavor, people with knowledge of the matter said.
Bakkavor has been considering the latest proposal, the people said, asking not to be identified because the information is private. It has already rejected at least two previous offers from Greencore. The most recent cash and stock bid it’s disclosed was valued at 189 pence per share including a planned dividend.
Shares of Bakkavor have gained 15 per cent this year, giving the company a market value of about £976 million (€1.2 billion).
Deliberations are ongoing and there’s no certainty they will lead to a deal. Representatives for Greencore and Bakkavor declined to comment.
Bloomberg News first revealed earlier this month that Greencore had approached Bakkavor to express interest in a tie-up. Greencore later confirmed the move, saying it’s looking to build scale by combining complementary businesses and touting the potential synergies from a transaction.
Greencore said after the last rejection that it will continue to evaluate all strategic opportunities, including a potential move for Bakkavor. The company is required to announce by 5pm on April 11 whether it’s going to make a firm offer or walk away.
Dublin-headquartered Greencore was founded in 1991 following the privatisation of Irish Sugar. The company supplies food including sandwiches, chilled prepared meals and cooking sauces to big 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, Mark & Spencer and J Sainsbury. 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. – Bloomberg
