Bakkavor fights back against Greencore's undervalued takeover bid

In the UK, on March 10, 2025, Bakkavor, a prominent supplier of ready meals for Tesco, announced it had declined an unsolicited takeover bid from rival Greencore, which was valued at £1.1 billion. The proposal included a cash and share offer estimated at 189p per share. This offer was deemed by Bakkavor's board as significantly undervaluing the company and its future potential, leading them to unanimously reject it. Subsequently, Bakkavor's shares rose while Greencore's shares fell in the immediate aftermath of the announcement. Greencore, a company supplying food products to various UK supermarkets, had made two offers to Bakkavor leading up to the rejection. The latest bid was designed to provide shareholders with cash and partial equity in the combined entity. Greencore expressed that the merger would yield strong value creation opportunities and enhance the overall scale of both businesses, predicting a combined revenue of about £4 billion. Following the rejection, Bakkavor confirmed that their financial advisers evaluated Greencore's offer and concluded it did not reflect their strategic worth. Analysts noted that Greencore's approach to acquisitions is characterized by a 'bolt-on' strategy, aimed at incrementally enhancing its portfolio across specific categories, channels, or regions. In response to the developments, Greencore stated that it would continue to explore all strategic mergers and acquisitions possibilities despite the setback from Bakkavor. The market reaction reflected the perceived outlook of both companies; while Bakkavor's share price received an uplift, signaling investor confidence in its potential, Greencore's stock fell, indicating investor concerns about its valuation and merger prospects initiated by the failed overture.