Inter Link revealed that it achieved 99.9% service level for key customer Tesco last week as a recovery gets underway.
The cake supplier, which has £60m in debts, also saw above budget sales in May, chairman Jeremy Hamer told British Baker.
He added that information had now been passed to potential bidder and rival cake company McCambridge, and he expected McCambridge to make an offer for the company.
Shares in Inter Link Foods, which were trading at over £7 last year, tumbled to a low of 76p in March after a string of profit warnings. Inter Link currently has a market capitalisation of around £10.8m and McCambridge has built up around a 10% stake. McCambridge has been buying up shares in Inter Link at £1 a share.