Bakkavor’s chairman and CEO, brothers Lýdur and Ágúst Gudmundsson, have teamed up with US hedge fund The Baupost Group to take control of the UK-based own-label supplier.
The Gudmundssons, who set up the business in the 1986 and owned around 39% of Bakkavor, have struck a deal with Baupost to buy a chunk of shares in the business owned by Icelandic institutions.
Last year, bankers were hired to sell 51% of Bakkavor held by the institutional investors, which attained the stock in the wake of Iceland’s financial crisis in 2008. The crash led to the Gudmundssons entering into a financial restructuring and debt-for-equity swap in 2010 that left them owning just over 33% of Bakkavor.
Under a deal announced today (25 January), Bakk AL Holdings Limited, a company made up of the Gudmundssons and Baupost, has paid GBP163m (US$231.8m) for the institutions’ shares.
The transaction leaves Bakk AL Holdings – which the Gudmundssons control – owning 89% of the outstanding shares in Bakkavor. Details on how the Gudmundssons and Baupost have split the stake have not been disclosed.
The Gudmundssons willl retain their jobs at Bakkavor. Ágúst Gudmundsson said: “I am delighted to welcome The Baupost Group to Bakkavor. They are globally recognised as highly-successful, long-term investors and are supportive of the company’s continued expansion plans.”
Bakkavor is likely to announce its results for 2015 next month. In the first nine months of the year, the company saw sales and profits increase, although like-for-like sales in the UK were flat.
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