Cake and bakery giant employing hundreds of Scottish workers to gain new owner

Finsbury Food Group, the bakery business that recently swallowed iconic Scots confectionery brand Lees, has agreed to be taken private in a deal worth some £143.4 million.

Finsbury Food Group announced the acquisition of iconic Scots confectionery brand Lees earlier this year.

The group is set to be bought by Isle of Man-based asset management company DBAY Advisors, with investors in the baking firm getting 110p in cash for each share. Shares in Finsbury soared after the deal was announced. The group makes cakes and bakery goods, supplying a raft of big names across both the grocery retail market and the “out-of-home eating” food service sector in the UK and Europe. Its acquirer, Frisbee Bidco, is owned by DBAY, which has offices in Douglas and London and has held shares in Finsbury since August last year.

DBAY said it believes Finsbury’s “public listing and the current turbulence in quoted equity markets substantially inhibit its ability” to pursue growth opportunities, such as acquisitions, to boost its scale and reach.

Finsbury, which employs hundreds of workers at its Lightbody business in Hamilton, announced the acquisition of Lees earlier this year in a deal worth almost £6m. Established in 1931, Lees is famous for making branded confectionery and meringues.

Finsbury chairman Peter Baker said: “For the next phase of the Finsbury Group’s development, the business will need to pursue strategic, transformational mergers and acquisitions to achieve the scale required to be successful in an increasingly competitive and demanding market place. I am confident that Finsbury will thrive under DBAY’s stewardship in the private market, with access to DBAY’s investment and operational support to pursue the current strategy of scaling Finsbury’s buy-and-build M&A in the future.”

Finsbury’s directors intend to unanimously recommend the offer to shareholders ahead of a general meeting to vote on the deal, which, if passed, is expected to complete in the closing months of 2023. As part of the deal and instead of receiving cash per share, shareholders in Finsbury are also being offered the alternative of non-voting B ordinary shares in the bidding company for each share held.

DBAY chief executive Alexander Paiusco added: “We strongly believe Finsbury would benefit from transformational M&A, including international expansion, and this would be better achieved in private ownership without the barrier of the current listing.”