Greencore and Bakkavor granted more time in £1.2bn takeover talks

(Sharecast News) - Greencore and Bakkavor have been granted more time to seal a £1.2bn takeover, the FTSE 250 convenience food makers confirmed on Friday. Pre-packed sandwich specialist Greencore announced in early April that it had agreed in principle a 200p per share deal to acquire Bakkavor, one of the UK's biggest makers of fresh convenience food.

Under Takeover Panel rules, Greencore had until 11 April to carry out due diligence before either making a formal offer or walking away, a so-called put up or shut up.

The deadline was then pushed back to 9 May, and has now been extended once more to 1700 BST on 23 May.

In a brief statement, issued with the consent of Greencore, Bakkavor said it had applied for the extension "to allow time to continue discussions with Greencore regarding the other terms and conditions of the possible offer, including completion of mutual confirmatory due diligence to the satisfaction of Greencore and Bakkavor".

It added that there was "no certainty any firm offer" would be made.

Should the cash and stock deal go ahead, it will create a market-leading food group with combined revenues of around £4bn. Bakkavor's customers include Tesco, Marks & Spencer and Waitrose.

The 200p offer price represents a 32.5% premium to Bakkavor's closing share price on 13 March. Bakkavor had previously rejected an earlier 189p per share offer from Greencore.

As at 0900 BST, shares in Greencore were up 1% at 191p, while Bakkavor was trading 2% higher at 186.36p.