November 10, 2017 / 7:23 AM / 11 days ago

Ready meals firm Bakkavor Group resurrects canceled IPO

LONDON (Reuters) - Ready meals supplier Bakkavor Group plc (BAKK.L) said on Friday it has revived plans to float on the London Stock Exchange only a week after saying it was shelving its initial public offering due to market volatility.

The firm, which counts supermarkets Marks & Spencer (MKS.L). Waitrose and Tesco (TSCO.L) as its major customers, had said on Nov. 3 that the IPO would not be in the interests of the company or shareholders even though it had received “sufficient institutional demand to cover the offering”.

However it said on Friday that it was now going to go ahead and float 25 percent of the firm at a price of 180 pence per share, valuing the company at 1.04 billion pounds ($1.37 billion).

Bakkavor’s announcement last week that it was cancelling its listing was seen as a blow for Britain’s IPO market, coming on the same day that broadcasting masts firm Arqiva said it was also shelving plans to go public.

A source familiar with the company’s plans said Bakkavor had been worried some investors it had marketed the IPO to had not been convinced by the firm’s long-term plans.

However the source said that over the past week the company and its advisors had met with some new potential shareholders and got together a more “concentrated group of longer term” investors, prompting it to push ahead with the listing again.

“It is particularly pleasing that our initial register has such a strong presence of well-respected long-term investors,” said Bakkavor chairman Simon Burke.

The firm, which is the UK’s largest producer of hummus, will raise 100 million pounds from the sale of new shares in the group while some of its existing shareholders will sell some of their stakes as well.

Bakkavor started out as a cod roe manufacturer and exporter before brothers Agust and Lydur Gudmundsson expanded the business. The company’s growth strategy led to it running into difficulties during Iceland’s financial crisis, causing it to restructure and attract new investors.

It generated revenues of almost 1.8 billion pounds and a pretax profit of 63.1 million pounds last year.

HSBC (HSBA.L) and Morgan Stanley (MS.N) are leading the IPO process, with Barclays (BARC.L), Citigroup (C.N), Rabobank and Peel Hunt also working on it.

It is expected to start trading on LSE on Nov 16.

Reporting by Emma Rumney; Editing by Rachel Armstrong

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