The FTSE 250-listed Tate & Lyle experiences a notable share price surge amidst takeover speculation. The company is reportedly targeted by US-based Advent International. Advent International is currently in preliminary discussions with no guaranteed offer. The proposed acquisition may exceed Tate & Lyle’s current market valuation. Tate & Lyle is also engaged in a major acquisition deal with CP Kelco.
Tate & Lyle, the globally recognised ingredients company, has recently witnessed a significant increase in its share price by over 12%. This surge is attributed to market speculation concerning a potential takeover by the US private equity group, Advent International. As reported by the Financial Times, Advent International is in the early stages of formulating a bid for Tate & Lyle, which is listed on the FTSE 250 index.
Despite the growing rumours, it remains uncertain whether Advent will proceed with a definitive offer. Insiders suggest that the potential deal could exceed Tate & Lyle’s existing market valuation of £2.8 billion, which has been bolstered to £3.2 billion following the recent share price increase.
Advent International has a history of targeting British companies, including a notable bid for aerospace manufacturer Cobham. This previous acquisition sparked a significant dispute involving the Competition & Markets Authority due to national security considerations, though the takeover was eventually successful.
In parallel with this potential takeover, Tate & Lyle is actively pursuing the acquisition of CP Kelco, a speciality ingredients firm, from JM Huber Corporation for $1.8 billion (£1.4 billion). This acquisition includes operations in the United States, China, and Denmark and is projected to close by the end of the current year.
The recent adjustments in regulatory policies by City regulators have allowed Tate & Lyle to bypass a shareholder vote for this transaction. These revised listing regulations enable companies to engage in certain transactions deemed ‘significant or related party’ without necessitating shareholder approval. This strategic move aligns with Tate & Lyle’s broader business objectives and expansion efforts.
Neither Advent International nor Tate & Lyle has issued comments regarding these developments at this juncture.
The potential takeover and acquisition activities underscore a dynamic period of transformation for Tate & Lyle.
