Bakkavor mentioned right now (14 March) Greencore’s takeover bids undervalue its enterprise.
Earlier right now, Eire-based Greencore revealed it had tabled two affords for Bakkavor within the final fortnight.
The latest bid, put ahead on 7 March, was a mixture of money and shares and valued Bakkavor at £1.14bn ($1.47bn).
Below the phrases of the provide, Greencore shareholders would personal round 59.8% of the brand new firm, with Bakkavor traders holding the rest.
Greencore mentioned bringing the 2 own-label suppliers collectively would create “a number one UK convenience-food enterprise”.
UK-based Bakkavor rejected the second provide on Monday. In a press release right now responding to Greencore’s disclosure of its bids, Bakkavor described the affords as “unsolicited, conditional, cash-and-share proposals”.
The corporate added: “The board of Bakkavor, along with its monetary advisers, fastidiously evaluated the newest proposal and concluded that it considerably undervalued the corporate and its future prospects.”
Greencore mentioned its second provide for Bakkavor implied a valuation of its goal at 189p a share, together with a “remaining dividend” that was a part of the bid.
The corporate added the provide represented a 25% premium to Bakkavor’s closing share value yesterday and a 32% premium to the group’s three-month, volume-weighted, common share value.
UK-based Bakkavor makes merchandise together with prepared meals and desserts for patrons together with Tesco.
In 2024, the corporate generated greater than 80% of its £2.29bn underlying income within the UK however it additionally does enterprise – and has factories – within the US and China.
Greencore, additionally listed in London, provides chilled, frozen and ambient meals from 16 factories within the UK. The corporate’s prospects embody main UK grocers together with Tesco, Sainsbury’s and Asda. Within the group’s final full monetary yr, it took in £1.81bn in income.
In 2018, Greencore introduced its exit from the US after a decade out there, promoting its enterprise there to an affiliate of Hearthside Meals Options for $1.07bn.
The mixed Greencore and Bakkavor would have “a various product providing, robust business relationships and market-leading capabilities in engaging segments throughout the UK comfort meals panorama”, Greencore mentioned right now.
The group mentioned the brand new enterprise “would have enhanced capabilities throughout a complementary set of classes, facilitating higher innovation and benefiting each prospects and customers”.
It added: “There’s potential for substantial synergies ensuing from a mix of the 2 companies, additional enhancing development and worth creation for Bakkavor and Greencore shareholders.
“Greencore will proceed to guage all strategic alternatives, together with Bakkavor. There may be no certainty {that a} agency provide shall be made.”
Requested by Simply Meals if Greencore would make a 3rd bid, the corporate declined to remark however pointed to its perception {that a} mixture of the companies is “a extremely compelling worth creation alternative for each Bakkavor and Greencore shareholders”.
Shares in Bakkavor had been up 18.21% on the day at 178.5p at 15:33 GMT.
Shares in Greencore had been down 1.79% at 187p at 15:34 GMT.
