Australian baked goods group Patties Foods said today (2 June) its board had accepted a takeover offer from local private-equity firm Pacific Equity Partners.

Mark Smith, Patties Foods’ chairman, insisted the board “remains confident” in the company’s plans to grow the business but said the bid “represents attractive value for shareholders”.

Patties Foods first announced it had received the offer from Pacific Equity Partners on Friday. Pacific Equity Partners has tabled a bid worth AUD1.65 a share in cash, including a special dividend of up to $0.25 per share, with an equity alternative.

The offer value Patties Foods at AUD231.8m. Patties Foods said the bid is worth 9.5 times thecompany’s underlying EBITDA in its 2015 financial year and is a 31.5% premium to the volume-weighted average price of its shares in the month leading up to the announcement of the bid on Friday.

The Patties Foods board have backed the offer “subject to no superior proposal emerging” and an independent expert determining the move “is in the best interest of Patties shareholders”.

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By GlobalData

Members of Patties Foods’ founding Rijs family together hold 36.6% of the companys shares, including the interests of Harry Rijs and Richard Rijs, who are directors of the business. The members of the family have each indicated they intend to vote in favour of the bid, again in the absence of a better offer emerging and subject to an independent review.

The alternative versions of the Pacific Equity Partners bid on offer including Patties Foods taking one Class B share in a Australasian Foods Holdco Pty, an entity set to make the acquisition, subject to any scale back to ensure the total number of Class B shares do not exceed 45% of the total shares in the holding company.

A third option is for investors to elect to receive Class B shares in the holding company in exchange for between 50% and 100% of their Patties shares – subject to the scale back – and AUD1.40 in cash for the remainder of their Patties shares.

Investors will vote on the plans in August.