Shares in Tate & Lyle soared over 12% following a potential buyout bid by a major US private equity firm, Advent International.
- This speculation has driven Tate & Lyle’s market capitalization to an impressive £3.2 billion.
- Advent, ranked as the eighth-largest private equity firm, is reportedly in preliminary stages of bid formulation.
- The acquisition may surpass Tate & Lyle’s current market value of £2.8 billion.
- The developments coincide with Tate & Lyle’s strategic acquisition of CP Kelco, worth $1.8 billion.
Shares in Tate & Lyle, a prominent food and beverage company listed on the FTSE 250, have experienced a significant surge of over 12% following news of a potential takeover by Advent International. Advent, a US-based private equity giant, has been speculated to be formulating a preliminary bid, as reported by the Financial Times and referenced by City AM. Insiders reveal that Advent, recognized as the world’s eighth-largest private equity firm, remains in the early stages of this process, with no guarantee of a concrete offer materializing.
The potential bid is expected to value Tate & Lyle above its existing market capitalization of £2.8 billion. In light of this, the company’s stock market value has notably increased to £3.2 billion. While the specifics of the proposal are yet to be finalized, industry experts anticipate that Advent’s intentions might transcend a straightforward purchase.
Previously, Advent had engaged in a notable acquisition of British aerospace firm Cobham, which resulted in a contentious battle involving the Competition & Markets Authority over national security concerns that ultimately saw success. This backdrop further intensifies the intrigue surrounding Advent’s current interest in Tate & Lyle.
Interestingly, this development in Tate & Lyle’s narrative emerges shortly after their strategic maneuver to acquire CP Kelco, an American specialty ingredients company. Valued at $1.8 billion (£1.4 billion), this purchase allows Tate & Lyle to bypass a shareholder vote, courtesy of revised City regulations that enable companies to engage in significant transactions without direct shareholder approval. This regulation shift pertains to substantial or related party transactions.
Notably, the acquisition of CP Kelco from JM Huber Corporation includes its operations across the United States, China, and Denmark. This expansion is slated for completion before the conclusion of the year, marking a pivotal step in Tate & Lyle’s growth strategy.
The potential acquisition by Advent International combined with strategic acquisitions positions Tate & Lyle for significant growth.
