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Listed bakery group Finsbury Food has agreed to a £143.4m takeover offer from Isle of Man-based asset management firm DBAY Advisors.
The offer of 110p a share represents a premium of almost 24% to yesterday’s 89p closing price.
DBAY, which has offices in Douglas and London, has held shares in Finsbury since August 2022.
The firm said it believed Finsbury’s listing on the London Stock Exchange’s AIM market held the bakery group back from pursuing growth opportunities, in particular acquisitions.
DBAY added the future prospects of Finsbury would be better served as a private business, with “a supportive majority shareholder and access to additional sources of both equity and debt to fund accelerated and sustainable growth”.
Finsbury’s directors intend to unanimously recommed the offer to shareholders ahead of a general meeting to vote on the deal.
Finsbury chairman Peter Baker said the group had a a successful track record under the current leadership of delivering sustainable, profitable organic growth along with strategic, targeted acquisitions.
“For the next phase of the Finsbury Group’s development the business will need to pursue strategic, transformational M&A to achieve the scale required to be successful in an increasingly competitive and demanding market place,” he added.
“I am confident that Finsbury will thrive under DBAY’s stewardship in the private market, with access to DBAY’s investment and operational support to pursue the current strategy of scaling Finsbury’s buy-and-build M&A in the future.”
DBAY chief executive Alexander Paiusco said: “We have been supportive shareholders of the business for over a year and have been impressed with the management team during our ownership, but we strongly believe Finsbury would benefit from transformational M&A including international expansion and this would be better achieved in private ownership without the barrier of the current listing.
“We look forward to working with Finsbury’s management and employees to accelerate Finsbury’s strategy and unlock the long-term value in Finsbury for all stakeholders.”
Shares in Finsbury shot up 22.6% this morning to just shy of the offer price at 109.1p.
Morning update
A fifth consecutive month of slowing food price rises helped drive a surprise drop in the UK inflation rate in August.
Inflation fell to 6.7% in the year to August, down from 6.8% in July and the third month in a row that the rate has come down.
It was helped by price rises in food and drink slowing down, with the Office for National Statistics (ONS) highlighting milk cheese and eggs as primary drivers in the industry.
Food and non-alcoholic drinks inflation fell from 14.8% in July to 13.6% in August, while prices continued to rise at a faster pace for alcoholic beverages and tobacco, up from 9.4% to 10.5%.
British Retail Consortium CEO Helen Dickinson said retailers had worked hard to bring costs down.
“Fierce competition between supermarkets has helped to bring down prices for many essentials including bread, butter, milk and fish,” she added.
ONS chief economist Grant Fitzner noted that falls in the “often-erratic” cost of overnight accommodation and air fares also helped eased the headline rate of inflation.
But he added it was partially offset by an increase in petrol and diesel prices compared with the steep decline seen a year ago.
The FTSE 100 opened 0.6% higher at 7,710.32pts as markets weighed up what the inflation figures might mean for tomorrow’s Bank of England interest rate decision.
Other than Finsbury, earlier risers in fmcg included Just Eat Takeaway, up 6.3% to 1,132p, and B&M, up 3.1% to 574.2p.
Wynnstay, Associated British Foods and Fever-Tree are among the fallers, down 1.2% to 395.3p, 0.4% to 2,077p and 0.4% to 1,260.1p respectively.
Yesterday in the City
The FTSE 100 managed to keep its head above water yesterday, rising 0.1% to 7,660.20pts.
On a busy day for fmcg results, Ocado rose 1.4% to 797.6p as it improved trading in the third quarter, while C&C Group climbed 5.5% to 139.2p on good progress in the first half.
Naked Wines led the fallers as it plunged 11.1% to 62.2p after finally publishing its full-year results, which showed a £15m pre-tax loss and tumbling sales.
McBride also sank 9.2% to 40p despite bouncing back after a tough run of results and Eagle Eye was down 5.1% to 536p despite a year of strong revenue and profit growth.
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