Greencore and Bakkavor have secured additional time to negotiate the terms of a potential £1.2bn ($1.57bn) takeover bid.
Last week, the two UK food manufacturing giants announced that their boards had reached an agreement in principle regarding Greencore’s latest offer for its ready-meal competitor, following the rejection of two previous bids by Bakkavor.
In a statement issued on 2 April, the companies revealed that Bakkavor’s board indicated it would be “minded unanimously to recommend” the new offer to its shareholders, contingent upon Greencore presenting a firm intention to proceed with the bid.
The actual submission of the offer hinged on several conditions, including both parties conducting due diligence. Greencore faced a deadline until 17:00 UK time today (11 April) to announce a definitive decision on whether to proceed with the bid.
Today, Bakkavor confirmed that the UK Panel on Takeovers and Mergers approved its request to extend this deadline to 9 May.
Bakkavor stated that this extension would provide vital time to continue discussions regarding the other terms and conditions of the potential offer, including completing mutual confirmatory due diligence to the satisfaction of both Greencore and Bakkavor.
According to the terms of the proposed transaction, Greencore would control 56% of the resulting entity, with Bakkavor shareholders retaining the remaining stake.
“This announcement has been made with the consent of Greencore,” Bakkavor announced.
Last week, Greencore emphasized that the planned acquisition would cultivate a “leading” UK convenience food business, resulting in combined revenues of approximately £4bn. However, the deal will still require approval from competition regulators.
UK-based Bakkavor specializes in food manufacturing, producing ready meals and desserts for clients such as Tesco. In 2024, the company generated over 80% of its £2.29bn underlying revenue in the UK, while also maintaining operations and factories in the US and China.
Dublin-based Greencore delivers chilled, frozen, and ambient food from 16 factories throughout the UK. Its clientele includes major grocery chains like Tesco, Sainsbury’s, and Asda. In the last full financial year, Greencore reported revenues of £1.81bn.
In a significant strategic move, Greencore announced its exit from the US in 2018 after a decade-long presence in the market, selling its operations to an affiliate of Hearthside Food Solutions for $1.07bn.
