Last month, Italian Food Group Newlat Food made a non-binding offer for Hovis, a 134-year-old British company that produces flour and bread, which is owned by Premier Foods and Gores Group. However, Newlat is threatening to pull out of the race to buy Hovis and will only resume if it gets an exclusive negotiation period. The move comes after reports surfaced that several other bidders are in talks to acquire the company.
Sky News is reporting that Hovis is being valued at roughly $129 million (100 million euros). The company has performed well during the pandemic, increasing its share of the UK bread market to 22% despite stiff competition.
During the initial stages of lockdown and pandemic, its sales surged as people stockpiled food supplies. However, it may only prove to be a temporary bump. Consumers’ changing tastes show a clear shift towards more gluten-free diets. As a result, companies like Hovis have faced declining revenues in recent years, a major motivator for Premier Food to explore a sale of its 49% stake.