Shares in Tate & Lyle (TATE) surged after the food producer confirmed that Ingredion (INGR) has proposed a cash offer for the company.
Led by CEO Nick Hampton, Tate & Lyle also revealed its US ingredients peer had made a number of earlier approaches for the business.
Tate & Lyle has struggled to serve up top-line growth in recent years. The absence of growth and other challenges have depressed the FTSE 250-listed firm’s share price.
Back in February, Tate & Lyle said its Q3 sales performance was crimped by the persistence of subdued market demand.
What’s the offer on the table?
Under Ingredion’s latest takeover proposal, Tate & Lyle shareholders would receive up to 615p per share. This would be through a combination of 595p in cash and the right to receive a final dividend of up to 13p for FY26. Shareholders would also be entitled to an H1 dividend of up to 7p.
Under the UK takeover rules, Ingredion must announce a firm intention to make an offer or state it does not intend to make an offer by 5pm on 11 June.
Tasty morsel
For the uninitiated, Tate & Lyle develops ingredients and solutions which reduce sugar, calories and fat, add fibre and protein, and provide texture to food and drink. Its products are found in beverages, bakery products, snacks, sauces, and dressings.
For the third quarter to December 2025, group revenue rose 15% on a reported basis. This reflected a boost from Tate & Lyle’s 2024 acquisition of pectin-to-speciality gums provider CP Kelco.
However, on a pro forma basis, sales were 2% lower reflecting ‘continued muted market demand’.
Tate & Lyle left its FY26 guidance unchanged. It expects both revenue and EBITDA to fall by low‑single‑digit percentages versus last year’s pro forma comparatives.
Even after today’s spike, Tate & Lyle shares are down 40% on a five-year view. Downgrades triggered by a demand slowdown have hurt sentiment and depressed the share price.
But Ingredion clearly recognises the value on offer.
Buying Tate & Lyle would certainly strengthen the competitive position of Jim Zaillie-led Ingredion, which also provides ingredients to global food and beverage manufacturers.
Whether Tate & Lyle’s board and major shareholders accept the offer is another matter. Private equity group Advent was previously rumoured to be mulling a bid for Tate & Lyle too. So there is a chance that a bidding war breaks. Watch this space for updates.
Read the press release here: https://www.tateandlyle.com/investors-hub
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