The board of directors of Humpty Dumpty Snack Foods Inc. is recommending that shareholders accept a $26.7-million takeover offer from Old Dutch Foods Ltd.
HD Snax Ltd., a subsidiary of privately-held Old Dutch, has agreed to offer $2.85 per share in cash for all of Humpty Dumpty (TSX:SNX) , which is based in Kitchener, Ont. The companies said the offer included a five-per-cent premium on Humpty Dumpty's March 20 closing share price.
Humpty Dumpty shares rose 13 cents to $2.84 on the TSX.
"This offer is the culmination of a value maximization process aimed at unlocking shareholder value first announced by the company in August 2005," Bonita Then, the chair of the board of directors of Humpty Dumpty, said in a release.
"The board of directors carefully considered and pursued a number of strategic initiatives in addition to the offer, including the realignment of its manufacturing capacities, the sale of non-core assets, and sale and leaseback transactions."
Institutional investors and management shareholders who own just over 80 per cent of Humpty Dumpty's shares have already agreed to tender their holdings to the Old Dutch offer.
"This is an exciting opportunity for both companies," said Darek Nowakowski, the chief executive officer of Humpty Dumpty. "Humpty Dumpty's market is in Eastern Canada and New England, while Old Dutch has a strong market position in Western Canada and the Midwestern U.S."
Humpty Dumpty has agreed to pay HD Snax a break-up fee of $950,000 if Humpty Dumpty recommends that shareholders accept an offer from another bidder.