Australian food manufacturing firm Patties Foods has accepted a $232m acquisition bid made by a private equity firm.
Earlier this week, the company said it was approached by Pacific Equity Partners (PEP) with a takeover offer of $1.65 per share. The offer valued Patties at $231.8m.
Food contamination issues that surfaced last year forced Patties to recall many of its frozen berry products. Since then, the company has been a target for acquisition.
Patties, the maker of Four'n Twenty pies and Nanna's frozen desserts, has entered into a scheme implementation deed with PEP, which enables the private equity to acquire 100% stake in the food manufacturer.
Shareholders may see tax benefits from the $1.65 per share offer, as it includes a $0.25 per share special dividend. Patties directors have unanimously suggested shareholders to vote in favour of the acquisition.
Patties chairman Mark Smith: "Whilst the board remains confident in management's plans for growth and innovation in the core brands and the business is experiencing strong momentum, the scheme represents an attractive value for shareholders."
The deal is also supported by the members of Patties' founding Rijs family, who own 36.6% stake in the company.
PEP's managing director David Brown has already hinted that Patties would continue its food manufacturing operations in Bairnsdale.
Brown was quoted by ABC News as saying : "We acknowledge the very important role Patties Foods plays in the local community at Bairnsdale and we look forward to supporting that ongoing relationship."
While the acquisition is in cash, Patties shareholders have been given a choice to retain their shares in the company. Shareholders will have an option to vote on the scheme at a meeting in late August.
