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Finsbury Food Group, the UK bakery business, has agreed to a £143.4m ($177.1m) takeover bid from asset management firm DBAY.

The move, announced today (20 September), will see the business taken private. Finsbury is listed on AIM, London’s junior stock market.

Shares in the Vogel’s manufacturer surged more than 22% in early trading this morning after the deal was announced.

Finsbury said DBAY is well placed to take the company forward and fund “transformational M&A”.

The bread and cake maker, one of the largest bakery groups in the UK, said in a stock exchange statement: “DBAY has followed Finsbury’s story for some time, attracted by the business model and strength of the management team, and began acquiring Finsbury shares in August 2022.”

Isle of Man-based DBAY will acquire Finsbury through its Frisbee Bidco vehicle.

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By GlobalData

DBAY said it will work with Finsbury’s directors – who voted unanimously to recommend the offer to the baker’s shareholders – to take the business private.

Commenting on the deal, Peter Baker, non-executive chairman of Finsbury, said: “Finsbury has a successful track record under the leadership of the current management team of delivering sustainable, profitable organic growth along with strategic, targeted acquisitions. For the next phase of the Finsbury group’s development the business will need to pursue strategic, transformational M&A to achieve the scale required to be successful in an increasingly competitive and demanding marketplace.

“I am confident that Finsbury will thrive under DBAY’s stewardship in the private market, with access to DBAY’s investment and operational support to pursue the current strategy of scaling Finsbury’s buy-and-build M&A in the future.”

Alexander Paiusco, chief executive of DBAY, said: “We have been supportive shareholders of the business for over a year and have been impressed with the management team during our ownership, but we strongly believe Finsbury would benefit from transformational M&A including international expansion and this would be better achieved in private ownership without the barrier of the current listing.

“We look forward to working with Finsbury’s management and employees to accelerate Finsbury’s strategy and unlock the long-term value in Finsbury for all stakeholders.”

Finsbury supplies bakery products to the retail and foodservice sectors and counts major multiples and household name restaurant brands among its clients.

The company is headquartered in Cardiff, Wales, and has other domestic operations in its home country, England and Scotland as well as European production facilities in France and Poland.

In January, it acquired Scottish baked goods and meringue firm Lees Foods for £5.7m.

In a trading update issued two months ago, Finsbury reported sales of £413.7m for the financial year ending 1 July, 16% up on the previous year.