PEP launches $165m takeover bid for Australia's Patties

Patties announced in a filing that PEP had offered to pay A$1.65 per share for all outstanding shares. The price includes any dividends paid after the proposal date, along with a possible undisclosed equity alternative.

According to the filing, Patties and PEP are in advanced talks, and Patties' board feels that engaging with the GP is in the best interests of shareholders. However, chairman Mark Smith added that discussions are ongoing and there is no guarantee of a formal offer. Patties' stock closed at A$1.33 on May 27, but climbed following the announcement, reaching around A$1.57 by the afternoon of May 30.

Patties' best-known products are the Four'n Twenty meat pie brand and the Nanna's line of frozen desserts. In its half-year results the company reported a drop in revenue from A$138 million for the six months ended December 2014 to A$126 million for the six months ended December 2015. Over the same period net profit fell from A$8.2 million to A$7.3 million.

The company attributed the decline in revenue to lower sales for Nanna's, following a recall of Nanna's Frozen Berries due to contamination concerns. Patties sold off the frozen fruit line in December last year.

PEP has made several food-related acquisitions in Australia, including Pinnacle, the Australian bakery unit of Irish food giant Kerry Group, which it bought for a reported A$250 million last year. Its former portfolio companies include Griffin's Foods, sold in 2014 for NZ$700 million ($608 million) to Philippines-based Universal Robina, and Peters Ice Cream, sold for a reported A$450 million to UK ice cream company R&R.

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• Topics
• Australasia
• Consumer
• Buyouts
• Buyout
• Australia
• Pacific Equity Partners