Patties Foods – which was embroiled in a hepatitis A scare last year – has unanimously recommended its shareholders accept the takeover bid from Pacific Equity Partners.
“Whilst the board remains confident in management’s plans for growth and innovation, the scheme represents an attractive value for shareholders,” Patties chairman Mark Smith said.
The company’s 2014/15 profit was severely dented by a fall in frozen fruit sales following a recall of its Creative Gourmet and Nanna’s frozen berry products in February 2015, and profit in the first half of the current financial year declined almost 12 per cent.
PEP managing director David Brown said the bid reflects the quality of Patties, its heritage and the strength of its local team.
“We believe the continued opportunities for investment in Patties Foods under private ownership are exciting,” he said.
“Patties’ manufacturing platform positions the business well for future growth.”
PEP has experience in consumer foods in Australia and New Zealand, having owned and expanded businesses including Peters Ice Cream, Manuka Health, V energy drinks, Pinnacle Bakery, Tegel and Griffin’s Foods.
Members of Patties’ founding Rijs family – which together have a 36.6 per cent stake in the company – plan to support the bid, in the absence of the board recommending a higher offer.
The family’s backing is also subject to an independent expert determining that the bid is in the best interest of Patties shareholders.
A takeover would likely net the Rijs family around $84.15 million, based on PEP’s cash offer of $1.65 a share.
Patties shares were up 10.5 cents, or 6.65 per cent, at $1.685 in a lower Australian market at 1235 AEST.
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