A package of investment buyers, private equity firms and business companies are competing against Hovis, one of Britain’s most successful food labels, for a bid worth well over £100 million.
Sky News has learned that companies such as Endless, Epiris – the buyout business that recently picked up Bella Italia and Café Rouge restaurant chains – and Aurelius Equity Opportunities are among around half a dozen parties that have sent indicative offers to Hovis.
The 134-year-old bread maker, which is partly owned by London-listed Premier Foods, was placed up for sale by its controlling shareholder, The Gores Group three months ago.
Sources said this weekend that Hovis received indicative offers from at least one food producer in Europe and additional private investors.
The sales phase is likely to be used by Premier Foods, which owns Mr Kipling, Bisto and Angel Delight, as an opportunity to sell its 49pc stake in the company, Sky News reported in June.
Four years ago, it paid off the remaining value of its Hovis stake.
The auction was timed to coincide with a rebound in the fortunes of Hovis, which was exacerbated during the coronavirus pandemic by an increase in sales.
Hovis employs more than 2,700 people and, having sold two flour mills in 2018, is concentrating on its bakery operations.
During the UK lockdown, an increase in demand for environmental food brands is known to have helped all of the key bread producers: Hovis, Kingsmill, which is owned by Associated British Foods, and Warburton’s family-owned.
None of its major U.K. competitors will certainly be able to acquire Hovis for purposes of competition.
Food analysts said that Hovis was expected to command a price tag between £100 m and £150 m.
Established in 1886, with its iconic 1973 television commercial showing a boy pushing his loaf-laden bike up a steep hill, Hovis became one of the best-known food brands in Britain, cultivating a home-grown image.
Like other manufacturers, however, as an increasing number of customers turn to bread-free diets, Hovis faces rigid challenges with the segment in long-term structural decline.
The business has an estimated 28 percent market share of branded and pre-packaged bread, with the larger bakery market in the UK reported to be worth £4 billion in annual sales.
Gores paid £30 million for its stake under the agreement reached with Premier in 2014, half of which was deferred and contingent on future performance.
It added that in the next five years around £200m would be invested in Hovis to improve its operational infrastructure and reinvigorate the brand.
Hovis and the bidders declined to comment on the procedural specifics.