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Thursday 22 August 2019

Hummus maker loses taste for stock market flotation

Bakkavor had been planning an initial public offering this month which would have raised around £100 million.

Bakkavor supplies supermarkets across the country (PA)
Bakkavor supplies supermarkets across the country (PA)

By Ravender Sembhy, Press Association City Editor

Bakkavor, food supplier to a host of supermarket giants, has become the latest company to ditch plans for a stock market flotation after citing market “volatility”.

The company, which is also the UK’s biggest maker of hummus, had been planning an initial public offering (IPO) this month which would have raised around £100 million.

However, the group said on Friday: “Bakkavor, a leading provider of fresh prepared food, announces that it will no longer proceed with its plans for an initial public offering.

“Whilst the company received sufficient institutional demand to cover the offering, the board has taken the decision that proceeding with the transaction would not be in the best interests of the company, or its shareholders, given the current volatility in the IPO market.”

The float would have valued the group at as much as £1 billion, with around 25% of its capital to have been floated on the London Stock Exchange.

The news comes after business services provider TMF Group also ditched plans for an IPO in October, opting instead for a sale to private equity firm CVC Capital.

Bakkavor supplies Tesco, Sainsbury’s, Marks & Spencer, and Waitrose and claims to account for 30% of the UK market for freshly prepared meals, pizza and desserts.

The firm added: “Bakkavor will continue to pursue its proven strategy within the fast-growing fresh prepared food sector, where the group’s expertise and focus on innovation have made it a clear market leader.

“The group’s ability to deliver long-term sustainable growth is underpinned by its strong financial position.

“The business continues to trade well and against this backdrop, the board remains confident in the outlook for the group.”

The firm is owned by its Icelandic founders Agust and Lydur Gudmundsson and US hedge fund Baupost, which own 59% and 41% respectively.

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