(Reuters) -Britain’s Bakkavor has rejected two bids from Greencore to buy it, the latest of which would have valued the food manufacturer at 1.14 billion pounds ($1.48 billion), the companies said on Friday.
Bakkavor said the offer significantly undervalued it.
Shares of Bakkavor jumped more than 18% to 179.5 pence, their highest in nearly six and a half years, while Greencore fell about 1%.
Bakkavor’s stock was still under the implied value of 189 pence per share from the cash-and-stock proposal that also included a dividend right.
Greencore, which operates in the UK and Ireland, has benefited from resilient demand for its pre-packaged sandwiches, chilled soups, and prepared meals, but it faces higher labour costs after the British government raised contributions from employers.
Greencore said its last proposal, made on March 7, provided a “highly compelling value creation opportunity” for both companies, with bigger scale and cashflows if merged, adding that it was evaluating “all strategic opportunities”.
Bakkavor, which operates in Britain, China and the United States, reported 4% revenue growth for 2024.
Under the latest proposal, Greencore shareholders would own about 59.8% of the bigger group and Bakkavor investors would own the rest.
Greencore has until April 11 to make a firm offer for Bakkavor or walk away, under British takeover rules.
($1 = 0.7729 pounds)
(Reporting by Pushkala Aripaka in Bengaluru; Editing by Shreya Biswas and Barbara Lewis)
