- Cake maker agrees £143.4 million takeover
- Bid price represents near 24% premium
- DBAY believes food group is better off private
Shares in Finsbury Food (FIF:AIM) surged 23% higher to 109.5p after the cakes, buns and muffins maker recommended a £143.4 million takeover by Isle of Man-based asset manager and largest shareholder DBAY.
Under the terms of the deal, Finsbury Food’s shareholders will receive 110p per share in cash, a 23.6% premium to yesterday’s closing share price, as the Cardiff-headquartered company becomes the latest small cap name to go private. In fact, more than 80 companies have left the main market and AIM this year through takeovers or de-listings.
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FAIR AND REASONABLE OFFER
Finsbury Food, which supplies supermarkets and the foodservice sector with celebration cakes, organic breads, rolls and muffins and whose character licensed portfolio spans well-known brands such as Disney (DIS:NYSE), Hasbro (HAS:NASDAQ) and Mattel (MAT:NASDAQ) among others, labelled DBAY’s offer ‘fair and reasonable’.
The company, which also has cake partnerships with the likes of chocolatier Thorntons, drinks giant Diageo (DGE) and national treasure Mary Berry, managed to deliver a resilient performance in the year to 1 July 2023 in the face of persistent cost inflation and macroeconomic uncertainty.
Total sales fattened up 16% to £413.7 million with a helping hand from price increases and incremental volumes from the acquisition of Lees Foods.
BETTER OFF IN PRIVATE HANDS?
Founded in 2011, Isle of Man-based DBAY invests predominantly in listed equities, supports management teams and assists them in growing their businesses. DBAY began buying Finsbury shares just over a year ago and has amassed a 13.1% stake.
DBAY CEO 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.’
Finsbury Food’s appropriately-named chairman Peter Baker commented: ‘Finsbury has a successful track record under the leadership of the current management team 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.’
The Finsbury Food board believes DBAY’s offer provides shareholders with ‘an accelerated, de-risked opportunity to realise their investment in full and in cash at an attractive premium to both the current share price and the long term weighted average share price.’
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