Bakkavor changes its mind and pushes ahead with London listing
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.