Devro makes sausage casings for a global client base

Shareholders at sausage casing manufacturer Devro are set for an extra bumper windfall as Saria today increased its £540m takeover offer, while factory workers in Scotland mull a potential strike over pay.

The North Lanarkshire-based group revealed it had received an increased and “final” offer from the German multinational after the buyer “noted the views of certain shareholders” following November’s announcement.

The revised price will see shareholders receive 320p a share in cash, up from 316.1p, in addition to a second 10p interim dividend.

It pushes the value of the group, which makes sausage skins for the likes of Richmond, from £540m to £562m, with an enterprise value, which includes debt and cash on the balance sheet, of £692m, a multiple of 11.3 times.

Shares in the group jumped 6.7% this morning to 327p, with the new offer representing a 72% premium to the 192p closing price on the day before the offer was made public in November last year.

Devro’s board said the offer was “fair and reasonable” and recommended it to shareholders ahead of the general meeting scheduled for 3 March.

Meanwhile, the Unite union also announced today that it is balloting more than 200 members at the Moodiesburn factory in a dispute over pay.

Production and maintenance staff had rejected a pay offer amounting to 3% for 2023, Unite said.

Strike action and an overtime ban is expected to take place from late March if the ballot, which opens today and closes on 9 March, is successful.

“Devro’s pay offer is substantially below the current cost of living, which means it is a pay cut and completely unacceptable to our members,” said Unite general secretary Sharon Graham.

“Devro can easily afford to pay better, and it should do exactly that. It must table an improved offer or face strike action in the coming weeks.”

Unite industrial officer Wendy Dunsmore added: “Devro has a healthy balance sheet, and they should be making a realistic offer rather than stringing our members along.

“Unite has tried to engage in negotiations to seek a positive resolution to this dispute but the company appear unwilling to reward their loyal workforce. Strike action will be inevitable unless Devro makes an offer which meets the aspirations of our members.”

Devro declined to comment.