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(Alliance News) - Bakkavor PLC on Friday said it has granted suitor Greencore PLC an extension to the deadline for it to make a firm takeover offer, as the convenience food making peers discuss a possible GBP1.2 billion bid.
Greencore has to announce its intention to make an offer or walk away - the so-call 'put-up-or-shut-up' deadline - by end of business on May 9, pushed back from Friday.
Bakkavor said the deadline extension is to allow time to continue discussions with Greencore, including completing due diligence.
London-based Bakkavor is a manufacturer of prepared food, with retail customers including Tesco PLC and Marks & Spencer Group PLC, while Greencore is a Dublin-based manufacturer of convenience foods.
Last week, Bakkavor and Greencore said they had reached a preliminary understanding on the essential financial conditions of a potential cash and share offer by Greencore for Bakkavor.
Under the terms of the possible offer, Greencore would pay 85 pence in cash and 0.604 of a Greencore share per Bakkavor share.
Bakkavor shares were down 0.2% to 173.78 pence in London on Friday morning. Greencore shares were flat at 169.20p. Bakkavor's market capitalisation, at GBP1.01 billion, is larger than its suitor's. Greencore's market cap is GBP747.2 million.
In addition under the potential offer, Bakkavor shareholders will retain the right to a final dividend of 4.8p per share. Exclusive of the final dividend, it implies a value of 200p per share in Bakkavor, and valuing all of Bakkavor's shares around GBP1.2 billion.
Despite Bakkavor's larger size, due to the cash component of the deal, Greencore shareholders would own 56% of the enlarged company and Bakkavor shareholders 44%.
By Olivia Mason-Myhill, Alliance News reporter
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