(Bloomberg) – Bakkavor Group PLC rejects cash and stock bids from Irish convenience food maker Greencore Group Plc, which is worth £1.14 billion ($1.5 billion).
Greencore provided 85pc cash and 0.523 Greencore shares for each Bakkavor stock in its March 7 revision proposal, according to a statement Friday. Bakkavor shareholders will also reserve the right to receive a final dividend of 4.8p per Bakkavor shares.
Including dividends, the BID value of Bakkavor is 189 pence per share, representing a 25% premium on Thursday’s closing price. Bakkavor rejected the latest proposal, which had previously rejected Greencore’s earlier proposal on February 27.
Bloomberg News reported Friday that Greencore has contacted Bakkavor in recent weeks to express interest in collaboration. Greencore, led by CEO Dalton Philips, said in a statement Friday that a deal will help build scale by combining complementary business and touting potential synergies in the deal.
Greencore said it will continue to evaluate all strategic opportunities, including Bakkavor, although there is no agreement to be reached. The company must announce it before 5pm local time on April 11, whether it is to make an offer or walk away.
Rothschild & Co. Give Greencore advice on potential deals.
The two companies have explored partners over the past few years, but have not led to a deal, people familiar with the matter said. At some point in 2008, Bakkavor held about 11% of the equity interest in Greencore, but only sold his shares after a few months due to turbulent financial markets.
Greencore was founded in 1991, after the privatization of Irish sugar. The Dublin-based company offers food, including sandwiches, refrigerated prepared meals and cooking seasonings, and serves food to major supermarkets in the UK as well as travel retailers and coffee shops.
Bakkavor offers prepared meals, pizza, bread and salads for groceries like Tesco Plc, Mark & Spencer Group PLC and J Sainsbury PLC. Its website shows that the UK accounts for about 85% of the company’s total revenue last year. Bakkavor also operates in the United States and China.
Any deal needs to win the Icelandic brothers who founded Bakkavor, Agust and Lydur Gudmundsson, who still own about 50% of the company’s brothers. Agust retired in October 2022. Lydur served as CEO from 1986 to 2006 and served as non-executive chairman until 2017.
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