Bakery firm, Finsbury Food Group, has agreed to a private takeover after striking a deal worth £143.4m.

Finsbury, which supplies goods to several of the UK’s largest supermarkets, is set to be acquired by Frisbee Bidco, a company owned by funds managed by Isle of Man-based asset manager, DBAY.

The acquisition’s terms will see Finsbury shareholders entitled to 110p in cash per scheme share, with the cash offer representing a premium of approximately 23.6% to the closing price of 89.0p on 19 September.

Finsbury is a manufacturer of cake and bread bakery goods, supplying a broad range of customers within both the grocery retail and “out of home eating” foodservice sectors. It comprises a core UK bakery division and an overseas division that together incorporate manufacturing sites in the UK and Poland, and an 85% equity stake in a French business that supplies and distributes Finsbury’s UK-manufactured products and third-party products in Europe.

The group’s £143.4m valuation is based on the entire issued ordinary share capital of 130.4 million shares.

Finsbury non-executive chairman, Peter Baker, said: “For the next phase of Finsbury’s development the business will need to pursue strategic, transformational M&A to achieve the scale required to be successful in an increasingly competitive and demanding marketplace.

“I am confident that Finsbury will thrive under DBAY's stewardship in the private market, with access to DBAY’s investment and operational support to pursue the current strategy of scaling Finsbury's buy-and-build M&A in the future.

“The Finsbury board has carefully reviewed the terms of DBAY’s cash offer, and believes it provides shareholders with an accelerated, de-risked opportunity to realise their investment in full and in cash at an attractive premium to both the current share price and the long term weighted average share price.”

Frisbee Bidco, a limited company registered in the Isle of Man and formed in August for the purpose of this acquisition, is an entity ultimately owned by funds managed by DBAY. It has not traded since its date of incorporation, nor has it entered any obligations other than in connection with the acquisition.

DBAY, founded in 2011, has offices in Douglas and London and manages a range of funds and co-investment vehicles for endowments, foundations and other institutional investors. It invests predominantly in listed equities and can also hold unlisted instruments.

Chief executive of DBAY, Alexander Paiusco, added: “The cash offer represents an opportunity for Finsbury shareholders to realise their investment in cash at a premium to the historical share price of Finsbury and as an alternative to the cash offer we have offered Finsbury shareholders the ability to retain a shareholding in Finsbury going forward through the alternative offer.

“We have been supportive shareholders of the business for over a year and have been impressed with the management team during our ownership, but we strongly believe Finsbury would benefit from transformational M&A including international expansion and this would be better achieved in private ownership without the barrier of the current listing.”

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