Egg-free cake specialist Cake Box has rejected a takeover offer from an Australian asset management group.
The AIM-listed bakery chain confirmed via a statement to the London Stock Exchange that it had received an unsolicited approach from River Capital to acquire it at an indicative price of 160 pence a share.
Cake Box said its board had ‘unequivocally rejected the Indicative Approach as materially undervaluing the Company and no further discussions with River Capital have taken place’. The announcement had been made without the consent of River Capital, it added.
The 160p-per-share offer was reported to have been made in early June, when Cake Box shares had dipped to 120p. They have since leapt up to 170p at time of publication, which is still less than half the peak price of 404p they hit back in November 2022.
Melbourne-based investment firm River Capital acquired Australian bakery chain The Cheesecake Shop in February 2022. The brand opened its 200th store in Australia last week, and also operates 30 outlets in New Zealand.
Cake Box said it was confident of further progress after its latest results posted in June showed a 5.6% increase in group revenue for the 12 months up to 31 March 2023, going from £33m to £34.8m. This was a slight improvement on the 5% sales growth it had predicted in a trading update two months prior.
The business noted that the softening of inflation and ‘enhanced controls’ had supported its margin progression, while significant investments in baking and storage facilities had helped it maintain continuity of supply and provide greater purchasing power. A new website launched last month continued growth of its online sales, with Cake Box boasting a strong balance sheet of £7.4m at period end.
The brand announced a new target of 400 stores after 20 franchises were opened over the past financial year, expanding its estate to a total of 205 across the UK.
“The market outlook is improving, our capabilities have been expanded, and the Cake Box brand is stronger than ever,” said co-founder and CEO Sukh Chamdal. “We have the right platform in place for the Group’s development to accelerate over the coming year and beyond.”
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