Lees Foods in £5.6m acquisition deal

Scottish confectionery group Lees Foods is the subject of a takeover bid by new plc Randotte, in a management buy-out.

Under the recommended proposal for the acquisition of the Coatbridge-based group, parent company of Lees of Scotland and Waverley Bakery, scheme shareholders would be entitled to 230p per share, with Randotte to acquire the entire share capital, valued at approximately £5.6m.

Randotte (no.555) Limited was registered at Companies House in February this year, specifically for the purposes of the acquisition.

Lees Food directors Clive Miquel, David Simson, Albert Croll, Nadia Millar and Klaus Perch-Nielsen are all Randotte directors and, subject to completion of the Exchange Agreements, will be shareholders in Randotte.

Analyst Shore Capital has been acting as an independent financial adviser to the board, and recommended that scheme shareholders vote in favour of the acquisition.

In September last year the group reported that sales had increased by 6% in the six months to 30 June, up from £9.6m to £10.2m. Gross profit increased by 5% to £3.4m.

However, the company saw its adjusted pre-tax profit fall from £564,000 to £505,000 as a result of soaring material costs – mainly sugar – which Lees said had been “caused by the ongoing shortage of supply in Europe”.

Lees of Scotland produces a range of products under the Lees brand, including snowballs, teacakes, meringues and seasonal biscuits. Waverley Bakery manufactures and sells ice cream cones and wafers and accessories to both the independent trade and retailers.

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