Bakery group McCambridge has started a due diligence examination of British cake maker Inter Link after both sides settled their differences over a confidentiality agreement.
Known for its brown bread, McCambridge reiterated its threat to withdraw its takeover approach for Inter Link in a stock exchange statement just after 8am yesterday. Shortly before 11am, the company told the market the dispute was over.
"McCambridge is pleased to announce, following direct discussions with Inter Link this morning, agreement has been reached on the terms of the disputed confidentiality agreement to enable execution to take place later today."
The news prompted a 9.3 per cent rise in Inter Link's share price to 117.5p on the Alternative Investment Market in London. This followed a 12.24 per cent drop on Tuesday when the differences emerged. Controlled by Michael McCambridge, a grandson of the founder of the bakery business, the company has annual sales of £32 million (€47.2 million) and just under 1,000 staff. It is Irish-owned, but run by an unlisted UK plc. Inter Link would be its tenth acquisition in Ireland and UK since 1999.
The confidentiality deal followed reports that one of Inter Link's institutional shareholders was seeking urgent talks with both companies. Inter Link, which has been in play since a fourth profit warning last March, indicated yesterday that McCambridge was not alone in its approach for the company.
Chairman Jeremy Hamer said he received a dozen expressions of interest to take over all or part of the company, but he indicated no formal talks had taken place.
Advisers were reviewing approaches for the whole group, he said, adding that interest had come from trade buyers, private equity and at least one publicly-listed company. "We've had no talks, but we've definitely had interest. We've had about a dozen calls in 2007." The row started when McCambridge said it had been thwarted by Inter Link in its efforts to advance its approach.
Inter Link responded that it could not provide access to its books and bankers without the consent of its board. McCambridge acknowledged yesterday that it must sign a confidentiality agreement, as was normal in such situations. - (Additional reporting, Reuters)
