Premier Foods sells stake in supermarket staple Hovis to private equity

Supermarket staple Hovis has been bought by a UK private equity firm.

The 134-year-old baker was sold for an undisclosed sum to Endless LLP by previous joint venture owners Premier Foods - the FTSE-250 listed company behind brands including Mr Kipling- and global private equity firm Gores Group.

Premier Foods, which held a 49% stake in the bread maker, said it would receive £37 million in proceeds from the deal.

Hovis chief executive, Nish Kankiwala, said the deal - sealed late on Thursday evening - had been reached after several months of "extensive engagement" between Hovis and the PE firm.

He said: "The acquisition will help drive our strategy for growth by bringing both strategic and operational value to Hovis."

The company, which is based in High Wycombe and employs around 2,800 people, had gone through major restructuring over the past four years, seeing it jettison its milling business.

Premier, which wrote off the value of its Hovis stake in 2016, said in a statement today that Hovis is now "commercially well positioned to grow under new ownership".  

Talk of the deal had boosted Premier Foods shares this week.

The UK’s bakery category is worth £4 billion. In September, Hovis said that it had managed to raise its share of the UK bread market to 22%.