Bakkavor has accepted Greencore’s provisional acquisition offer of approximately £1.2 billion, equating to 85p per Bakkavor share plus 0.604 in new Greencore shares. This offer translates to a total value of 200p per Bakkavor share. The two parties have been engaged in negotiations since early April.
The ‘put up or shut up’ (PUSU) deadline had to be extended twice, but a comprehensive agreement has now been finalized.
Upon completion, Greencore shareholders are projected to own approximately 56% of the combined group, while Bakkavor shareholders will retain about 44%.
The firms state that this deal, pending shareholder and regulatory approval, will merge two companies with complementary product portfolios. The merger aims to create a prominent UK manufacturing business with a “diverse product offering and strong commercial relationships operating in attractive segments” of the convenience food sector.
Commenting on the development, Bakkavor chair Simon Burke expressed: “We are very happy with the progress made by Bakkavor delivering its strategy and significantly improved returns, both in the UK and abroad. We have clear plans for continued growth and are confident in the prospects for Bakkavor over the coming years.”
Burke highlighted that there exists a clear “strategic, commercial and financial rationale” for merging with Greencore and thus the board is unanimously recommending this to Bakkavor shareholders.
“Having considered a combination previously, we believe that this transaction now proposes terms that we consider are very attractive to Bakkavor’s shareholders,” he continued.
“The transaction offers shareholders a significant premium, with an attractive combination of cash on completion and the ability to participate in the future value creation anticipated from bringing the two businesses together. For this reason, our board is unanimously recommending it to shareholders.”
Meanwhile, Bakkavor CEO Mike Edwards stated that the deal is expected to enhance performance at every level.
“The combined business will create more opportunities for colleagues, allow us to do an even better job for customers, and be even more resilient,” Edwards noted.
“I am confident that the relentless focus that both businesses have on quality, service, and innovation, and on striving to be a great place to work, will remain at the heart of the bigger business.”
A spokesperson for Greencore emphasized: “Bakkavor will complement Greencore’s existing product range – with several products they don’t make, including pizzas, breads, desserts, and chilled dips.”
“This combination is bringing together Greencore’s ‘food for now’ range with Bakkavor’s ‘food for later’ portfolio. This transaction has a compelling value creation case.”
