Cake sector shake-up as market leader could go private
its management were working with a private equity firm to broker a
possible takeover of the company.
Following rumours in local press over moves to take the company private, Inter Link announced management were: "in exploratory talks which may or may not lead to an offer for the company."
Inter Link built its empire by taking advantage of Britain's fragmented cake market over the last decade but, with new owners at the helm, it's possible the firm could extend its reach even further with renewed investment in core businesses.
However the cake and pastry business, which supplies retailers such as Tesco, was cautious, saying: "it is emphasised that these talks are at a very early stage and there can be no certainty that a formal offer will be made."
Inter Link did advise that, should an offer be made, the price would be "substantially in excess" of Friday's closing mid market price of 407.5p a share.
In July Inter Link recorded a 20.7 per cent growth in profits to £7.1m (€10.3m) but a 3.3 per cent drop in like for like cake sales due to this summer's unseasonably warm weather.
The company is Britain's largest mince pie producer - it is expected to sell 140 million this Christmas - and is licensed to produce Disney branded small cakes.
In a bid to further increase its hold on the market, Inter Link plan to enter the pudding market this year. It will produce both Christmas and all-year puddings under the Mrs Peeks brand. The facilities for this new line are predicted to open in spring 2007.
The company has bought more than 10 cake makers since 1994, including Soreen with its Maltloaf brand, and has strengthened its relationship with private label retailers.
