Tate & Lyle could become the next UK company to fall to an overseas takeover offer, after reports that the US private equity firm Advent International is preparing a bid for the group.
Shares in Tate & Lyle, which makes ingredients such as artificial sweeteners, jumped by as much as 13% on Wednesday after the Financial Times reported that Advent was in the early stages of preparing an offer.
If a bid comes, it would value the London-headquartered Tate & Lyle above its market value of £2.8bn before Advent’s interest emerged, the FT said. The company was valued at more than £3bn after Wednesday’s share price surge.
Several other London-listed companies have already fallen to foreign buyers this year. The packaging company DS Smith was acquired by its rival International Paper, the cybersecurity firm Darktrace was bought by Thoma Bravo, and the door and window components maker Tyman was snapped up by its US rival Quanex.
Advent, headquartered in Boston, Massachusetts, has made UK acquisitions before. It acquired the British defence company Cobham in early 2020, and owned the parcel group Evri – formerly Hermes – from 2020 until this year, when it sold it to Apollo Global Management.
Advent’s interest comes as Tate & Lyle tries to tie up its own takeover. In June it agreed to buy the US-based CP Kelco for $1.8bn (£1.4bn), to add to its speciality ingredients business and target demand for plant-based products. The deal was expected to close by the end of this year.
Dan Coatsworth, an investment analyst at AJ Bell, said: “It feels like Advent – if the rumours are correct – spotted an opportunity to run the numbers on Tate & Lyle while it was busy bedding in the CP Kelco deal. Pouncing on a business when it is distracted is par for the course with private equity and the big question now is whether Advent is prepared to offer a fair price to win over shareholders.”
Tate & Lyle was created in 1921 by the merger of two rival sugar refiners, Henry Tate & Sons and Abram Lyle & Sons. It can trace its history back to 1859 when Tate formed a partnership in Liverpool.
In 2010 it sold its sugar business to American Sugar Refining (ASR) for £211m.
Advent and Tate & Lyle declined to comment to the FT.
