Icelanders bag Geest with £485m bid

READY meals and fresh salads group Geest today gave up the battle with the supermarkets over price-slashing and recommended a £485m takeover bid from Icelandic rival Bakkavor.

The bid, worth 655p per Geest share with a 7p special dividend on top, was flagged at the end of last year after the Icelanders had built up a 20% stake.

Bakkavor has been in the UK prepared food market since 2000 when, having supplied smoked cod roe for making taramasalata to North London's Katsouris Foods for several years, it decided to take over its customer. It now makes ready meals as well as the Mediterranean dip.

Geest is better-known for its salads, fresh pastas and garlic breads although the two businesses overlap in ready meals. Their customers are all the major supermarkets chains and grocery shops. Customers such as Tesco and Waitrose are said to have given the deal their blessing.

Geest chief executive Gareth Voyle will become head of the UK operation for Bakkavor, which was founded 17 years ago by the Gudmunsson brothers, then aged 22 and 19.

This is the latest in a string of Icelandic takeovers in Britain. Baugur took over Big Food last month and has made an offer for Somerfield. It already owns Hamleys, Karen Millen and Oasis.

Bakkavor and Geest will control about 11% of Britain's fresh prepared foods market but this share doubles in some specific areas. Geest's shares have risen 250% to today's 653p since the start of 1996 when it sold its banana business.