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Takeover offer for Finsbury Food Group sends shares up 23%

Finsbury Food Group supplies breads and birthday cakes to supermarkets  (Finsbury Foods)
Finsbury Food Group supplies breads and birthday cakes to supermarkets (Finsbury Foods)

Finsbury Food Group looks set to be the next in a growing number of London-listed firms moving to private ownership, after a £143.4 million takeover offer for the bakery business was made.

Directors at the AIM-listed company, which supplies breads, birthday cakes and other products to supermarkets, convenience stores, restaurants and fast-food firms, have recommended approving the proposal.

The 110p cash per share proposal from a company owned by funds managed by asset management firm DBAY, is a 23.6% premium to the 89p closing price on September 19.

Shares in Finsbury Food Group, which listed in London in 2007, leapt 23%, or 20.55p, to 109.55p following the update.

Alexander Paiusco, chief executive of DBAY which has a 13.6% stake in Finsbury Food Group said: “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.”

Peter Baker, non-executive chairman of Finsbury, said: “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.”

He added: “I am confident that Finsbury will thrive under DBAY’s stewardship in the private market.”

Danni Hewson, head of financial analysis at AJ Bell said based on latest data (up to the end of July for firms on the junior market), if this deal completes it would mark the 85th company to leave the LSE so far this year.