The key financial terms of Greencore’s third cash plus shares offer were accepted by the Bakkavor board earlier this month, with the bid valuing Bakkavor at around £1.2 billion.
However, discussions over the other terms and conditions of the offer and due diligence processes have not yet been completed.
In accordance with Rule 2.7 of the Takeover Code, the initial deadline by which Greencore was required to announce a firm intention to make a finalised offer was 5pm on 11 April 2025, but following a request from Bakkavor the deadline has been extended until 5pm on 9 May.
This deadline is known as the ‘put up or shut up’ or PUSU deadline.
According to Bakkavor’s statement announcing the extension of the PUSU deadline, there can be “no certainty that any firm offer will be made”.
“We’re not there yet, but if it goes ahead the deal would be brilliant for the business and its colleagues, customers and other stakeholders,” said Mike Edwards, chief executive officer at Bakkavor.
“It would bring together two fantastic businesses, with the best people in the industry and an ability to take a ‘best of both approach’ to improve performance on every level.
“We expect to create more opportunities for colleagues, do an even better job for our customers and invest more behind innovation and growth. I am excited that our shareholders will retain a meaningful stake in the future group, and our founders, Agust and Lydur Gudmundsson, will have seats on the Board.
“In the meantime, this doesn’t change anything day-to-day as we continue to focus on driving the performance of the business and doing an excellent job for our customers.”
Greencore declined to comment when approached by Food Manufacture.
If it goes through, the merger of two key players in the convenience food landscape could attract attention from the Competition and Markets Authority (CMA), the UK’s principal competition regulator.
Speaking to Food Manufacture about a possible CMA probe, Marc Shrimpling, competition and trade partner at law firm Osborne Clarke, said: “The fact that both companies supply into the leading UK grocers is likely to mitigate any concerns the CMA would have about the deal creating anti-competitive market power, due to the significant countervailing buyer power held by the leading supermarkets.
“Nevertheless, it is possible that at least in certain niche segments or categories, the CMA may have sufficient concerns to launch an in-depth, Phase 2 review, in order to fully test whether or not the deal would lead to higher prices and/or less value for money for UK consumers.”
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