Shares in ingredients group Treatt (TET) soared 45% after the board recommended a takeover offer from German rival Döhler. The offer, at 305p per share, values Treatt at £183 million and represents a 48% premium to yesterday’s closing price.
Stronger together
Treatt specialises in producing high-quality flavours and fragrances for the beverage industry using natural fruit extracts and synthetic sources. Well known for its expertise with citrus flavours, the firm has moved into areas such as sugar reduction and tea.
Döhler’s offer represents a premium of 17% to Natara’s initial offer last September and 5% to its final offer last October. Also, Treatt shareholders will receive a final dividend of 3p per share for FY25 to be paid on 13 May.
The Döhler Group has a ‘deep understanding’ of Treatt’s business, having worked closely over many years as a strategic supplier and customer. The firm says the insights it has gathered enable it to take a ‘differentiated perspective’ on the company.
It argues public markets are unlikely to support Treatt in delivering its strategy due to their short-term focus. Döhler says it ‘firmly believes’ it is the right partner to unlock the full extent of Treatt’s growth potential.
Once again it has taken an industry insider to appreciate the hidden value in a UK small-cap. Having worked together for years, Döhler has seen the upside of joining forces and creating a leading global platform.
The UK has seen 10 consecutive years of net outflows from the stock market, peaking in 2024. International investors have sold more UK stocks than they bought in 114 of the last 118 months.
However, it’s not just international flows which have been negative. UK equity exposure among pension funds is now just 4% against over 50% at the start of the 2000s.
Is it any wonder there are bargains galore in this market? If you do your due dilligence, and you are happy with the risk-adjusted returns, now is an ideal time to start investing.
Read the press release here:
https://www.treatt.com/investor-relations
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