Greencore is a cusp that has acquired Bakkavor for £1.2 billion
Greencore is an indication that it will acquire fellow private label convenience business Bakkavor after putting in £1.2 billion ($1.555 billion) of new cash and stock offers.
Ireland-based Greencore said today (April 2) the Bacca Festival board of directors “main financial terms represent the value of caring about unanimously encouraging shareholders to make a transaction.”
London-listed Greencore revealed that it had two purchase bids to UK-based Bakkavor in March, but both were turned down.
The second person valued the business at £1.14 billion, but Bakkavor, who is also listed in London, said the offer. “It’s pretty underrated” Private label supplier of ready meals and desserts to major UK supermarkets.
In today’s stock exchange filing, Greencore said the latest bid “means” a 200p rating for Bakkavor based on Greencore’s “uninterrupted” stock price on March 13, the last day the offer period begins.
That valuation includes the final dividend payment, which amounts to a £1.2 billion acquisition offer.
Greencore is one share at 200p, and the offer represents a 32.5% premium over Bakkavor’s stock price on March 13th, and a 39.8% premium at the company’s volume-weighted closing price of 143p for three months starting March 13th.
Greencore said the acquisition was agreed on a “principles” with Bakkavor, increasing revenues of around £4 billion and creating a “major” UK convenience food business. However, contracts require clearance from competition regulators.
If the transaction is approved by a shareholder of Bakkavor, Greencore owns 56% of the group and the target shareholder holds 44%.
It is proposed that Agust Gudmundsson and Lydur Gudmundsson, currently non-executive directors of Bakkavor, will be on the combined business board.
“The boards of Greencore and Bakkavor look at attractive strategic, commercial and financial grounds for possible offers and believe that they provide highly attractive value creation opportunities for stakeholders in both Bakkavor and Greencore,” the application today read.
“There is the possibility of substantial synergies due to the combination of two businesses, potentially innovating, investing in customer and consumer proposals, and value creation for Bakkavor and Greencore shareholders.”
Freshly prepared food supplier Bakkavor has also operated in the US and China, earning £2.29 billion in 2024. The company employs 18,000 people across 43 sites in three markets.