Hovis owners set to sell bread brand for up to £150m
Hovis could reportedly be sold for as much as £150m as its owners look to offload the business later this year.
The brand’s biggest shareholder The Gores Group, has hired bankers to sell its controlling 51 per cent stake which it acquired six years ago, according to Sky News. The investment firm is understood to have appointment investment bank Baird to conduct an auction of Hovis.
Premier Foods, which owns the remaining 49 per cent is also reportedly supportive of the sale.
Analysts have predicted that Hovis could be sold for between £100m and £150m when the bidding process begins in the autumn or later.
The pandemic has proved to somewhat benefit the bread brand, as lockdown boosted sales. Hovis has more than 2,700 employees and is now focused on its bakery operations, having sold two flour mills in 2018.
The business has faced stiff competition in recent years as consumers opted for bread-free or gluten-free options, but it has retained an estimated 28 per cent market share.
The company recorded revenue of £460.9m in 2018, but said bread volumes fell 1.5 per cent due to competition from supermarket own-brand alternatives.
Under the deal struck with Premier Foods in 2014, Gores reportedly paid £30m for its stake, of which half was deferred and contingent on future performance.
Sky sources suggested that a merger with one of the major UK bread producers could pose regulatory issues, but Hovis is likely to attract interest from other food groups.
A Hovis spokesperson said: “We do not comment on market rumour and speculation. Hovis is performing strongly as a business and Gores and Premier Foods remain supportive shareholders.”
Premier Foods declined to comment and Gores Group could not be contacted for comment.