Bread maker Hovis could be snapped up by Italian firm Newlat Food after more than 130 years of British ownership.
The baker’s current owners, London-listed Premier Foods and US investment company Gores Group, have been approached by Newlat bosses with an offer which would make the Reggio Emilia-based company one of the largest players in the European food industry.
Hovis employs 2,800 people and has eight bakeries, one flour mill and three distribution centres. It has had a string of owners over the years.
It started life in the Cheshire town of Macclesfield in 1886 at the flour mill of Samuel Fitton and Sons, when a miller found a way to preserve the nutrients in the wheatgerm.
The business became one of Britain’s best-known brands after gaining popularity in the Seventies with an advertising campaign showing a boy pushing his loaf-laden bike up a steep hill. Gores bought a controlling stake in 2014.
Bread makers such as Hovis have struggled with the changing tastes of shoppers who increasingly favour gluten-free bread or small-batch rivals. The pandemic has also boosted local bakeries, a trend that is expected to continue as customers value businesses on the doorstep.
Nonetheless, Hovis has gradually increased its slice of the UK bread market by luring customers from rivals Kingsmill and Warburtons.
Sales surged at the peak of the crisis as Britons filled their cupboards with staple items and ate more meals at home.
In its most recent set of accounts, although revenues edged down to £333m, underlying earnings for Hovis’s core bakery operations grew by 5.5pc to £15.4m. It posted a pre-tax profit of £19.2m, up from a loss of £3.5m the year before, following a sale and leaseback of two of its bakeries in London.
It ended the year with net cash on its balance sheet of £14.1m, and has been investing in new products such as Hovis Glorious Grains and Hovis Fabulous Fibre.
Premier Foods, the owner of Mr Kipling, Bisto and Angel Delight, is thought to want to offload its 49pc stake in the company after writing off some of its value four years ago. The UK bakery industry is estimated to generate annual sales of £4bn.
Newlat makes dairy products and pasta.
Other bidders include Endless, Epiris, the buyout firm that recently bought restaurant chains Bella Italia and Café Rouge, and Aurelius, Sky News first reported.
Hovis, which is run by Nish Kankiwala, a former executive at Pepsico and Burger King, declined to comment.