Dublin-based baker McCambridge is in early-stage acquisition talks with struggling own-label cake manufacturer Inter Link.
The privately-owned company, which has a history of acquisitions in Ireland and the UK, recently bought a 9.1% stake in Inter Link and has now made an unsolicited approach for the firm.
Inter Link said preliminary discussions "may or may not lead" to an offer being made for the entire issued and to-be-issued share capital of Inter Link. It added that the board was considering the bid, "without diverting resource from its principal objective of returning Inter Link to profitability at the earliest practical opportunity".
McCambridge already owns a number of cake companies in the UK, including Husseys bakery in Berkshire, Queen of Hearts in Oxford and West of England Bakeries, based in Plymouth.
Despite issuing a number of profit warnings recently, Inter Link chairman Jeremy Hamer insisted the firm could still become profitable without a takeover, once the new management team has settled in. CEO Ian Croxford has just joined the firm, replacing Chris Thompson, who held the role for five months.
Inter Link is still seeking a finance director after the candidate it had recruited, Brendan Hynes, this week announced that he had decided not to join the company.
Hamer admitted that the tough own-label market alone could not be blamed for Inter Link’s change in fortunes and pointed to its disruptive central distribution project last year, as well as rising raw material and utility prices. "Things are fine from an operational point of view, but we are not making the right level of profit," he said. "This new financial year will be a turnaround year."
Inter Link’s share price is currently at 136p, down from 512.5p in September.
Speaking to British Baker last month Hamer denied that the malt loaf division, Soreen, could be sold off to raise cash.