New blow to town as US private equity giant Advent International attacks Tate & Lyle

A US private equity giant is preparing to attack London-listed Tate & Lyle in a fresh blow to the City.

Advent International is reportedly in the early stages of putting together a bid for the British ingredients supplier.

While the Boston-based takeover group may not decide to make a bid, any approach would exceed the company’s £2.8bn market value, the Financial Times reported.

A possible takeover of the company comes as the London stock market faces a crisis amid an exodus of companies.

It would see the 165-year-old Tate & Lyle, a founding member of the FT 30 index almost nine decades ago, leave the stock market.

The company’s origins date back to 1859, when Henry Tate established a sugar refining company in Liverpool before expanding to Silvertown, east London.

In 1921, the company merged with Abraham Lyle & Sons, famous for making golden syrup.

The bosses sold the historic sugar business, including Lyle’s golden syrup, to American Sugar Refining in 2010 for £211 million. Now, the London-based company focuses on ingredients that include sweeteners.

The potential bid comes as Tate & Lyle attempts to buy US pectin and specialty gums maker CP Kelco for £1.4bn.

“It seems private equity has been attracted by the sweet taste of another UK acquisition,” said Dan Coatsworth of investment platform AJ Bell.

‘It was only a matter of time before someone pounced on the business after its radical restructuring.

Without that baggage, Tate & Lyle had the right ingredients to become a more efficient and healthy business and that seems to have put dollar signs in Advent’s eyes.’

He added: “It seems as if Advent, if the rumors are correct, saw an opportunity to do the math on Tate & Lyle while it was busy dealing with the CP Kelco deal.

“Pounced on a company when it is distracted is normal in the private equity space, and the big question now is whether Advent is willing to offer a fair price to win over shareholders.”

The London stock market is facing a crisis amid a flurry of acquisitions, or companies deciding to move their listings or choosing to list in rival cities such as New York.

This year there has been a wave of interest in buying London-listed shares.

This has seen companies such as International Distribution Services, owner of Royal Mail, packaging giant DS Smith and logistics company Wincanton agree to be bought.