Devro agrees £667 million takeover offer from Germany’s Saria

Devro makes the casings used on sausages  (Sausage Press )
Devro makes the casings used on sausages (Sausage Press )

Devro, the sausage skin maker, has recommended a takeover offer from Germany’s Saria that values the Scottish company at £667 million and will provide some hearty fare for deal-starved bankers.

The price, at 316.1p per share, is a 65% premium based on where the stock closed on Thursday. The buyer is a privately held multinational which, alongside food, also produces biofuels and animal feed.

Saria praised Devro’s “reputation for product innovation” and said it expected the merged deal to “lead to a stronger research and development function” at the enlarged company.

Steve Good, chairman of Devro, said: “We believe that Saria’s understanding of our markets, its strong financial position and the cultural fit will benefit the group’s business and employees.”

As well as its Scottish operations, Devro has factories in China, Australia, Holland, the Czech Republic and the US. Saria’s Harald van Boxtel described the two businesses as “ideally placed to capture growth in both mature and emerging markets”

The company’s stock leapt to just under the offer price on Friday, up 115p to 307p.

J.P. Morgan Cazenove and PwC were financial advisers to Saria. Devro’s financial adviser was Lazard, while Numis Securities was its corporate broker.

It has not been a vintage year for dealmaking in the City, with a slump in the number of flotations only partially offset by bid interest in UK companies from abroad, helped by the weaker pound.