Bakkavor eyes £496m Geest

ICELANDIC chilled food raider Bakkavor ended months of takeover speculation by sticking a £496m price tag on British readymeal maker Geest.

It will hand shareholders 655p a share plus a special interim dividend of 7p a share if it can make the deal stack up. The potential offer price comes ahead of a two-month analysis of Geest's books and processes by the Reykjavik-based firm, which already holds a 20% stake.

Bakkavor, which bought Birmingham-based Katsouris for £102m two years ago, wants to strengthen its foothold in the lucrative-prepared foods market. The result of the marriage will be a giant in the pre-packed meal market, supplying the likes of Waitrose, Marks & Spencer and Morrisons.

Bakkavor boss Agust Gudmundsson stressed that a full-blown offer may not be forthcoming. Geest chairman Sir John Banham described the discussions so far as 'businesslike and friendly'.

The announcement came after market close, with the shares down 7½p at 615p.