Icelanders take 10% stake in Geest

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The Independent Online

An Icelandic readymeals manufacturer has taken a 10 per cent stake in its UK sectormate Geest, and immediately said it plans to buy more shares.

An Icelandic readymeals manufacturer has taken a 10 per cent stake in its UK sectormate Geest, and immediately said it plans to buy more shares.

Bakkavor, which already has a UK arm employing 2,500 staff and supplying meals and snacks to Tesco, Marks & Spencer and Sainsbury's, denied it had any plans to make a full bid for Geest.

Agust Gudmundsson, Bakkavor chairman, described the investment as a "long-term strategic investment", praised the Geest management's record of steady growth and said he had been attracted by the stock's high dividend yield.

Geest shares had spiked higher on Tuesday when Bakkavor first approached leading shareholders but Teather & Greenwood, its broker, failed to secure a substantial stake. Rumours of a bidder sent Geest shares soaring but by yesterday they had retraced some of their gains and Bakkavor was able to pick up 10.27 per cent of the company. It is understood the Icelanders hope to take their investment to 15 per cent.

The Gudmundssons - Agust and his brother Lydur, who is chief executive - made a courtesy phone call to Geest yesterday, but are not making demands for board representation or a change in strategy.

The Geest stake is Bakkavor's first investment of its kind. The company is following in the footsteps of its compatriots Baugurand Kaupthing, the Icelandic bank.

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