Bakkavor accepted Greencore’s provisional acquisition offer worth approximately £1.2 billion – 85p per Bakkavor share plus 0.604 in new Greencore shares, which translates to 200p per Bakkavor share – in early April, and the two parties have been hashing out the details since.
The ‘put up or shut up’ or PUSU deadline had to be extended twice, but a deal has now been reached in full.
Upon completion Greencore shareholders are expected to own close to 56% of the combined group, while Bakkavor shareholders will own around 44%.
The firm’s said that the deal, which remains subject to shareholder and regulatory approval, will bring together firms with highly complementary product portfolios and create a leading homegrown UK manufacturing business with a “diverse product offering and strong commercial relationships operating in attractive segments” of the convenience food landscape.
Commenting on news, Bakkavor chair Simon Burke said: “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 added that there was a clear “strategic, commercial and financial rationale” for the merger with Greencore and therefore the board was unanimously recommending it to the 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 chief executive, Mike Edwards, said that the deal would held drive performance on 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 commented.
“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 added: “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.”
