A top supplier of Marks & Spencer ready meals is leading a pack of British companies heading for a London stock market float.
Bakkavor, a Lincolnshire-based supplier of microwave meals to M&S, Waitrose, Costa Coffee and Sainsbury’s, is exploring plans to join the market later this year with its long-term adviser Rothschild, sources said.
The talks, which are at an early stage, could result in a float worth hundreds of millions of pounds. The food supplier made a pre-tax profit of £57m on revenue of £1.7bn in the year to December 2015, according to account filings. It has since received a cash injection from US hedge fund Baupost Group.
Bakkavor’s owners, including Icelandic brothers Agust and Lydur Gudmundsson, are considering selling, while Baupost is keen to cash in after investing a year ago.
Bakkavor could join a host of other businesses on the London market this year after a spate of failed floats in the autumn.
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TI Fluid Systems, one of Britain’s oldest car parts makers, has also revived listing plans, City sources said. Its owner, US buyout giant Bain Capital, is seeking a valuation of more than £2.6bn for the Oxford and Michigan-based business.
TI was forced to abandon its float plans in mid-October as fund managers withdrew support for new stock offerings across Europe, blaming global economic uncertainty. Private equity sources believe TI will receive backing for the listing in the first half of the year.
Meanwhile, pensions consultant Xafinity has held talks with City fund managers over joining the London market. The company, once part of London-listed registrar Equiniti, has enlisted Zeus Capital to advise on its options.
City sources said Xafinity, backed by buyout firm CBPE, could fetch £200m. Sources close to the talks said they were at an early stage and the company was assessing a range of options.
It comes as London prepares for two of its biggest listings in a decade. Logicor, a commercial property company, is seeking a valuation of up to £10bn and has enlisted Goldman Sachs to drum up support.
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City fund managers also expect British mobile network O2 to list early this year. O2’s Spanish owner, Telefonica, is looking to offload a large stake in the network to pay down its mounting debts. It is expected to be worth more than £9bn. However, a mobile spectrum auction planned for later this year could complicate its plans.
Telefonica will first sell its mobile phone mast business Telxius. Telefonica was forced to scrap a listing of Telxius in September after failing to garner support from investors. Banking sources said Telefonica could instead choose to sell a partial stake to infrastructure funds or sovereign wealth investors, paving the way for an O2 listing.
The float hopefuls will provide a welcome boost to the London market after a quiet year for new listings in 2016, as Britain’s referendum to leave the EU dented boardroom confidence. London hosted floats worth just $5.3bn (£4.3bn) last year, lagging behind smaller markets such as Copenhagen and Frankfurt, according to data provider Dealogic.