Shares in cheese and spread maker Dairy Crest Group (DCG) are top of the FTSE 350 today, up 13% to 625p after the firm agreed a £975m cash bid from Canada’s Saputo.
Shareholders in Dairy Crest will receive 620p per share, a premium of just under 12% to last night’s closing price and a 27% premium to the 30-day average price.
The Cathedral City and Clover maker is ‘an attractive platform for Saputo’ according to chief executive Lino Saputo.
For Dairy Crest shareholders the deal ‘represents a compelling opportunity, providing immediate value certainty’ adds Saputo.
At 620p the bid values the firm at 16 times current year earnings compared with 21 times earnings for Irish dairy producer Glanbia and 24 times earnings for Switzerland’s Nestle.
UK institutional shareholders in Dairy Crest include Invesco, Premier, Royal London and Troy Asset Management.
Shares highlighted Dairy Crest in October 2018 at 467p as a ‘Magic Formula’ stock due to its combination of high returns on capital and attractive valuation.
