Bakka­vor changes its mind and pushes ahead with Lon­don list­ing

The Daily Telegraph - - Business - By Jack Tor­rance

FOOD man­u­fac­turer Bakka­vor is go­ing ahead with its list­ing on the Lon­don Stock Ex­change just a week af­ter shelv­ing it blam­ing “mar­ket volatil­ity”.

The UK’S lead­ing hum­mus pro­ducer said yes­ter­day it had placed 25pc of its shares at 180p apiece, valu­ing the com­pany at £1bn – sub­stan­tially less than the min­i­mum val­u­a­tion of £1.2bn it had pre­vi­ously tar­geted. The food firm, a sup­plier of white la­bel ready meals to UK su­per­mar­kets, an­nounced it was pulling the float last Fri­day.

At the time it said: “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 Daily Tele­graph un­der­stands Bakka­vor was later ap­proached by in­vestors and per­suaded to re­vive the float.

Si­mon Burke, Bakka­vor chair­man, said: “The board and I are de­lighted to wel­come our new share­hold­ers. It is par­tic­u­larly pleas­ing that our ini­tial reg­is­ter has such a strong pres­ence of well-re­spected long-term in­vestors, re­flect­ing an ap­pre­ci­a­tion of the qual­ity of the busi­ness and its long-term prospects.” The FTSE 100 volatil­ity in­dex, a mea­sure of tur­bu­lence at the top of the Lon­don mar­ket, is down 38.4pc this year. The in­dex it­self has been re­peat­edly hit­ting record highs.

Bakka­vor has placed around 55m new shares with in­sti­tu­tional in­vestors, rais­ing net pro­ceeds of £86m, while its cur­rent own­ers, Ice­landic founders Agust and Ly­dur Gud­munds­son and US hedge fund Bau­post, have raised £158m from the place­ment of 89m ex­ist­ing shares.

Ex­ist­ing share­hold­ers will re­tain a com­bined 75pc of the firm’s equity and will be un­able to sell their shares dur­ing lock-up pe­ri­ods of six months for Bau­post and one year for the board of di­rec­tors, which in­cludes both of the founders. Founded in Ice­land in 1986, Bakka­vor was orig­i­nally an ex­porter of cod roe. It gen­er­ated prof­its of £62.1m on rev­enues of £1.76bn last year and em­ploys 16,500 staff in the UK.

Bakka­vor was be­hind a “hum­mus cri­sis” this year as Tesco, M& Sand Sains­bury’s tem­po­rar­ily pulled some of its lines af­ter con­sumers com­plained of a “metal­lic taste”.

Four su­per­mar­kets, Tesco, M& S, Sains­bury’s and Waitrose, ac­count for 78pc of Bakka­vor’s sales.

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