The Italian company confirmed in a statement on its website that it had made a non-binding bid to Hovis Holdings Ltd. shareholders.
It described Hovis as a brand with great history and reputation in the United Kingdom and added that the manufacturing and distribution structure of Hovis will give it the opportunity to benefit from many synergies and introduce a “virtuous cross-selling activity”.
“Newlat Food is awaiting a reply from the shareholders of Hovis and, therefore, any other eventual details regarding the transaction will be communicated with the evolution of the negotiation,” the company said.
Hovis is currently owned by Premier Foods, which holds a 49% stake in the company, and The Gores Group, a US investment firm with a 51% stake. In the United Kingdom, it employs 2,800 people in eight bakeries, one flour mill and three distribution centres.
Hovis refocused on prioritising its core baking company back in 2018, disposing of three mills in the process. The change followed the company’s strategic analysis to find the best path forward in an “economically challenging environment within a highly competitive market”.
In its full accounts released last week (28 September 2020) for the year ended 31 December 2019, Hovis reported that the bread and bakery industry remains highly competitive, with sales margins under pressure due to continued wider shifts in the grocery business.
Hovis announced that the bread and bakery industry remains highly competitive in its complete accounts published last week (28 September 2020) for the year ended 31 December 2019, with profit margins under pressure due to continuing broader changes in the grocery market.
It added that Covid-19 had generated ‘ considerable uncertainty ‘for many companies and, while it was not feasible to calculate the outcome of the situation, it did not intend to be adversely impacted.
“The business has seen an increase in demand for its products, along with unforeseen costs, and is working closely with customers to balance this demand against the available capacity within its supply chain footprint,”