(Alliance News) - Finsbury Food Group PLC on Wednesday said it has accepted a private equity buyout offer worth GBP143.4 million.

The takeover offer is from investment funds managed by Isle of Man-based asset manager DBAY Advisors Ltd.

DBAY offered to pay 110 pence per Finsbury Food share, a 24% premium to the stock's closing price in London on Tuesday. Finsbury Food shares were up 23% to 109.65p early Wednesday in London. The stock is up 40% over the past 12 months.

Cardiff-based Finsbury Food has roots going back to 1925. It makes cake and bread bakery goods sold via grocery stores and food-service outlets. It is known for both its celebration cakes and small snacking cakes.

DBAY first began buying Finsbury Food shares back in August of last year, building a 13% stake by December. It currently has a 13.6% stake. In addition, DBAY has acceptances for its offer from Finsbury Food directors, including Chief Executive Officer John Duffy, and from Investec Wealth & Investment Ltd for a further 12.3% of the company.

DBAY will offer an alternative to cash for shareholders who want to retain an economic interest in Finsbury Food. This will be in the form of non-voting B shares in acquisition vehicle Frisbee Bidco Ltd.

"DBAY believes strongly in the future potential of Finsbury but is firmly of the view that, in order to fulfil the growth potential of the business in the medium term, Finsbury needs to supplement its current organic growth with additional growth opportunities, including a meaningful and sustainable acquisition strategy," the two companies explained.

"DBAY believes that Finsbury's public listing and the current turbulence in quoted equity markets substantially inhibit its ability to pursue these growth opportunities, in particular acquisitions."

By Tom Waite, Alliance News editor

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