US food giant Ingredion weighs £2.7bn takeover bid for Tate & Lyle
Sweetener and ingredients firm Tate & Lyle has disclosed that they are in talks over a potential £2.7 billion takeover by US competitor Ingredion Incorporated, marking the latest acquisition attempt on a UK company.
London-listed Tate & Lyle announced that they received an approach from Illinois-based Ingredion offering 615p per share in cash, following several previous proposals.
Tate and Ingredion are currently in discussions, but Tate emphasized that there is no certainty that an offer will be made.
Ingredion has until 5pm on June 11 to make a firm offer or withdraw under Takeover Panel rules.
This comes in the midst of numerous approaches for British companies by foreign buyers, with laboratory testing firm Intertek earlier this week endorsing a £9.4 billion proposal from Swedish company EQT.
Shares in Tate & Lyle surged by over 50% in afternoon trading on Thursday.
However, the takeover attempt follows a period of pressure on shares over the past year, with Tate issuing a profit warning for the full year last October and reporting a 10% decrease in first-half profits in November.
Last year, Tate & Lyle acquired food and drink ingredients business CP Kelco in a deal worth approximately £1.4 billion.
The group is listed on the FTSE 250 Index and has been in existence for more than 165 years.
Although the brand is known for sugar products, Tate sold its sugar division – including the Golden Syrup factory in London – to American Sugar Refining for £211 million in 2010.
The deal allowed the US company to continue using the brand on its sugar products.
This left Tate & Lyle focused on sweeteners and its industrial food ingredients division.
The firm’s US suitor, Ingredion, employs more than 12,000 people globally.
It produces sweeteners, starches, nutritional ingredients, and biomaterials used in food and drinks, as well as in paper and pharmaceuticals.
The company dates back more than 100 years and has expanded through a series of acquisitions in the US and internationally.
UK’s Intertek Group ’Minded to Recommend’ EQT’s Final Takeover Bid
Intertek Group (ITRK.L) is now likely to accept EQT’s (EQT.ST) final takeover proposal after the Swedish private equity giant raised its bid once again following three previously rejected offers.
Following the news, Intertek shares gained nearly 7% in London as of midday Wednesday, while those of EQT were little changed in Stockholm.
Under the latest and improved bid, EQT, via its EQT X EUR SCSp and EQT X USD SCSp funds, offered Intertek shareholders 60 pounds sterling per share in cash, according to a Wednesday release. Prior to this, Intertek’s board "unanimously and unequivocally" rejected EQT’s earlier offers of 58 pounds per share, 54 pounds per share, and 51.50 pounds per share.
The UK-based quality assurance provider said its board "carefully evaluated" EQT’s final conditional proposal after "significant" engagement with its shareholders, concluding that it would be "minded to recommend" the sweetened bid if a firm offer is made. Intertek will now grant EQT access to confirmatory due diligence and temporarily halt its ongoing strategic review.
Under the terms of the proposed deal, Intertek shareholders would receive and retain the recommended final dividend of up to 1.077 pounds per share for 2025 if approved at the group’s May 20 annual general meeting.
"The strategic review announced by ITRK on April 14th has made a sale or breakup of the Intertek portfolio a live possibility. We see preserving the status quo as the least likely outcome of the review and think that a take-private, trade sale or demerger of the ’Energy & Infrastructure’ (E&I) assets all potentially have their merits, though see a trade sale to a listed player as a lower probability given the heightened geopolitical uncertainty at present," analysts at RBC Capital Markets said in a note. "Against this uncertainty, we think it likely that ITRK investors would vote in favour of the EQT proposal in the event it moves to a firm offer."
EQT has until June 11 to announce a firm intention to make an offer for Intertek or withdraw its bid.
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