US non-public fairness agency Advent International plots swoop on Tate & Lyle

A US private equity giant is preparing to swoop on London-listed Tate & Lyle in a further blow to the City.

Advent International is reportedly in the early stages of putting together a bid for the British ingredients supplier.

While the Boston-based buyout group may not decide to make an offer, any approach would exceed the company’s £2.8billion market value, the Financial Times reported.

Target: US private equity giant Advent International is reportedly in the early stages of putting together a bid for the 165-year-old British ingredients supplier Tate & Lyle

A potential takeover of the firm comes as London’s stock market faces a crisis amid an exodus of companies.

It would see the 165-year-old Tate & Lyle, a founding member of the FT 30 index almost nine decades ago, leave the exchange. 

The company can trace its roots back to 1859 when Henry Tate set up a sugar refining business in Liverpool before expanding to Silvertown in East London.

In 1921, the business merged with Abraham Lyle & Sons, which was famed for making golden syrup.

Bosses sold the historic sugar business, including Lyle’s golden syrup, to American Sugar Refining in 2010 for £211million. Now, the London-based company is focused on ingredients including sweeteners.

The potential bid comes as Tate & Lyle tries to buy American pectin and speciality gums maker CP Kelco for £1.4billion.

‘It looks like private equity has been lured by the sweet taste of another UK takeover,’ Dan Coatsworth at investment platform AJ Bell, said.

‘It was only a question of time before someone pounced on the business following its radical restructuring. 

Without the baggage, Tate & Lyle had the right ingredients to become a leaner and healthier business and that appears to have put dollar signs in Advent’s eyes.’ 

He added: ‘It feels like Advent – if the rumours are correct – spotted an opportunity to run the numbers on Tate & Lyle while it was busy bedding in the CP Kelco deal.

‘Pouncing on a business when it is distracted is par for the course with private equity, and the big question now is whether Advent is prepared to offer a fair price to win over shareholders.’

London’s stock market is facing a crisis amid a flurry of takeovers, or companies deciding to move their listings or opting to float in rival cities such as New York.

There has been a wave of takeover interest in London-listed stocks this year.

This has seen businesses such as Royal Mail-owner International Distribution Services, packaging giant DS Smith and logistics company Wincanton agree to be bought.