Tate & Lyle shares soar on Advent private equity takeover rumours
Shares in ingredients group Tate & Lyle have soared more than 12 per cent today after rumours emerged of a bid for the company from an American private equity group.
The FTSE 250 food and beverage company is being targeted by US-based Advent International, according to the Financial Times.
While Advent, which is the eighth largest private equity firm in the world, is in the early stages of preparing a bid, a firm offer is not yet certain.
Though the size of Advent’s offer is not yet known, it would exceed Tate & Lyle’s market value of £2.8bn, sources told the FT.
Since the news was made public, skyrocketing shares in the company have pushed its market capitalisation to £3.2bn.
Previous bid targets from Advert included British aerospace manufacturing company Cobham, which started a controversial takeover battle that dragged in the Competition & Markets Authority on national security fears. It was ultimately successful.
The news comes weeks after Tate & Lyle moved to take advantage of the City regulator’s new listing rules to dodge a shareholder vote on the acquisition of US speciality ingredients maker CP Kelco.
The new rules allow companies to carry out a wider variety of activities without a shareholder vote, including “significant or related party transactions”.
Tate & Lyle agreed to purchase CP Kelco from its current owner JM Huber Corporation for $1.8bn (£1.4bn), as well as taking control of its three divisions in US, China and Denmark.
The firm expects the transaction to complete before the end of this year.
Advent and Tate & Lyle declined to comment.