Bakkavor serves up rejection to Greencore’s £1.1bn takeover bid

Bakkavor has rejected a £1.1bn takeover bid from rival Greencore, a move that would have created a food giant with a combined revenue of £4bn.

An initial proposal was turned down by Bakkavor’s board on February 27, with a second, revised offer also dismissed on March 10, as it “significantly undervalued the company and its future prospects”.

Both companies are major ready-meal and food-to-go suppliers to UK supermarkets and are listed on the FTSE 250.

Ireland-headquartered Greencore turned over £1.8bn last year, producing sandwiches, sushi, and other products.

With its UK head office in Worksop and 14 factories across the country, the firm supplies 779 million food-to-go items annually.

Bakkavor, which generated revenues of £2.3bn in 2024, supplies grocers with soups, ready meals, sauces, salads, dips, and pizzas from its 20 factories and four distribution centres across the UK. The firm has faced significant disruption in the past year, with a strike at its Spalding site leading to shortages of dips, soups and wraps on supermarket shelves.

Greencore’s latest offer valued Bakkavor at 189p per share, representing a 25% premium on Bakkavor’s market price at the time.

The proposal included 85p in cash per share and 0.523 Greencore shares, with Bakkavor shareholders also entitled to a final dividend of 4.8p per share.

The deal would have seen Greencore shareholders owning 59.8% of the combined company, with Bakkavor investors holding 40.2%.

Greencore said it believed that “the revised proposal provides a highly compelling value creation opportunity for both Bakkavor and Greencore shareholders.”

Despite Bakkavor rejecting the offer twice, Greencore said it “will continue to evaluate all strategic opportunities, including Bakkavor. There can be no certainty that a firm offer will be made.”

Shares in Bakkavor rocketed by 16.6% as the markets digested the news, with the share price rising to 176p. Greencore’s share price fell 0.8% to 188.8p.