Italians watch bread maker Hovis with take-over bid

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Bread maker Hovis could be taken over by Italian company Newlat Food after more than 130 years of British ownership.The baker’s current owners, London-listed Premier Foods and US investment firm Gores Group, have been approached by Newlat bosses with an offer that would make the Reggio Emilia-based company one of the biggest players in the world. European food industry.

Hovis employs 2,800 people and has eight bakeries, a flour mill and three distribution centers. It has had a series of owners over the years.

It began life in the town of Macclesfield in Cheshire in 1886 at the Samuel Fitton and Sons flour mill, when a miller found a way to preserve the nutrients in wheat germ.

The company has grown into one of Britain’s best-known brands after gaining popularity in the 1970s with an advertising campaign showing a boy pushing his bike laden with bread up a steep hill. Gores bought a controlling stake in 2014.

Bread makers such as Hovis have struggled with the changing tastes of buyers who increasingly prefer gluten-free bread or rivals in small batches. The pandemic has also boosted local bakeries, a trend that is expected to continue as customers appreciate the businesses nearby.

Nevertheless, Hovis has gradually increased its share of the UK bread market by attracting customers from rivals Kingsmill and Warburtons.

Sales jumped at the height of the crisis as Britons stocked their closets with basic items and ate more meals at home.

In its most recent set of accounts, although revenue edged down to £ 333million, underlying profits from Hovis’ bakery business rose 5.5% to £ 15.4million. It posted a pre-tax profit of £ 19.2million, up from a loss of £ 3.5million the previous year following the sale and leaseback of two of its bakeries in London.

It ended the year with net cash on its balance sheet of £ 14.1million and invested in new products such as Hovis Glorious Grains and Hovis Fabulous Fiber.

Premier Foods, owner of Mr. Kipling, Bisto and Angel Delight, is believed to be keen to get rid of its 49% stake in the business after writing off some of its stock four years ago. The UK bakery industry is estimated to generate annual sales of £ 4 billion.

Newlat manufactures dairy products and pasta.

Other bidders include Endless, Epiris, the buyout company that recently bought the Bella Italia and Café Rouge restaurant chains, and Aurelius, Sky News reported for the first time.

Hovis, who is headed by Nish Kankiwala, a former Pepsico and Burger King executive, declined to comment.

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