Shares in cake and pastry maker Inter Link Foods leapt by 25% on Monday 25 September, after the company revealed it was in talks that may lead to a £70m management buyout.
Inter Link confirmed in a statement that it had received an approach from a private equity house, which would involve the company’s management, and is in exploratory talks, which may or may not lead to an offer for the firm. It emphasised these talks are at an early stage and there can be no certainty of a formal offer.
Shares in Inter Link Foods, which closed at 407.5 pence on Friday, had risen to 512.5 on Monday, valuing the Alternative Investment Market-listed company at £59.5m. The news followed a report in The Sunday Times on 24 September that members of the management team, led by executive chairman Alwin Thompson, were considering an offer of more than 570p per share, which would value the company at over £66m. It claimed Inter Link had appointed investment bank NM Rothschild to advise on the deal.
Inter Link Foods shares slumped by around 45% after it announced in May that 2006 profits would not meet market expectations and it said again in September that trading in the first quarter was difficult.
The firm operates from 12 bakery sites in the UK and a plant in Poland. In 2005 it made £4.4m in pre-tax profits on a turnover of £130m.