Patties is negotiating with a private equity takeover bidder, just over a year after the company was hurt by a food safety scare.
The food processing company, based in the Victorian town of Bairnsdale, has received a $1.65 a share offer from Pacific Equity Partners (PEP).
Patties was hit hard last year after its Nanna’s frozen berries were linked to 31 cases of Hepatitis A, although later testing of samples failed to show any instance of the pathogen.
The product recall saw the company’s profits fall and its share price drop from around $1.40 beforehand to a closing low of $1.05 earlier this year.
However, Patties shares have since rebounded to $1.33 as it exits its frozen berry product ranges.
The PEP bid offers total cash payments of $1.65 a share, inclusive of any dividends paid after the proposal was made.
There is also an unspecified possible equity alternative.
The Patties board has decided to engage with PEP to negotiate around the takeover bid, but said there is no guarantee of a deal being put to shareholders.
“The board remains confident in management’s plans for growth in the core brands and the business is experiencing strong momentum,” added Patties chairman Mark Smith in a statement to shareholders.
Patties said its shareholders should not take any action in relation to the PEP proposal at this stage.