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Hovis proved for auction
Posted on Thursday, 05 November 2020 10:45
Premier Foods has confirmed media reports it wants to cash in on its 49.0 per cent stake in Hovis after Newlat Food said it would not proceed further in the competitive tender for the baking business.
The Italian dairy, pasta and bakery items producer announced its interest in the acquisition but said it would only resume discussions if - on the basis of a non-binding offer - granted an exclusive negotiation period.
In the statement yesterday, Newlat noted this would let it proceed quickly to closing an agreement.
“As soon as the company receives a reply to the request for exclusivity or any other detail regarding the transaction, it will promptly notify the market.”
Premier’s statement released in response to this announcement noted both the media speculation and a statement from Newlat Food concerning its 49.0 per cent interest in Hovis Holdings.
“The group confirms that a sale process for a potential transaction in respect of Hovis is ongoing. However there can be no certainty that any transaction will conclude. The group will provide an update in due course as appropriate.”
Premier sold a 51.0 per cent stake in the brand to Gores Group for GBP 30.00 million six years ago.
Hovis is engaged in the production and sale of bread and baking products in the UK and Ireland and has two wholly-owned subsidiaries, Rank Hovis Milling, which stopped trading from February 2019, and Hovis Ltd.
According to the annual report for the 12 months ended 31st December 2019, this is a market which remains highly competitive, with sales margins under pressure due to broader changes in the supermarket grocery sector.
In FY 2019, Hovis generated revenue of GBP 333.76 million (FY 2018: GBP 460.96 million) and booked operating profit of GBP 5.68 million (FY 2018: GBP 1.34 million).
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