A leading private equity investor is close to clinching a takeover of Hovis that will return the bread-maker to British ownership.
Sky News has learnt that Endless is in advanced talks to buy Hovis after a bidding war against Newlat Food, an Italian food producer.
Sources said that a deal could be confirmed as soon as this week, although it has yet to be finalised.
On Wednesday morning, Newlat issued a statement to the stock exchange in Milan in which it said it had pulled out of the race to buy Hovis and wanted exclusive access to the bread-maker in order to resume talks.
Endless is understood to have edged ahead of Newlat in recent days.
The price that Hovis will fetch is unclear, although Sky News previously reported that its current shareholders wanted in the region of £100m for it.
The 134 year-old brand has been jointly owned by The Gores Group, an American investor, and London-listed Premier Foods since 2014.
Hovis employs more than 2,700 staff
In September, it filed results at Companies House for 2019 showing that it had increased its share of the UK bread market to 22% amid fierce competition with Kingsmill and Warburtons.
Sales are said to have surged during the initial part of the coronavirus pandemic, as British consumers stockpiled staple foods.
Premier Foods, which owns Mr Kipling, Bisto and Angel Delight, is expected to use the auction to offload its 49% stake in the company.
It wrote off the remaining value of its Hovis stake four years ago.
Hovis employs more than 2,700 people and is focused on its bakery operations, having sold two flour mills in 2018.
Established in 1886, Hovis became one of Britain’s best-known food brands, cultivating a home-grown image with its famous 1973 television advert showing a boy pushing his loaf-laden bike up a steep hill.
It was named the UK’s most iconic TV commercial in a poll last year.
Like other producers, however, Hovis faces stiff challenges with the category in long-term structural decline as a growing number of consumers switch to gluten-free diets.
The UK bakery market is estimated to be worth £4bn in annual sales.
Under the deal struck with Premier in 2014, Gores paid £30m for its stake, of which half was deferred and contingent on future performance.
The transaction was motivated in part by Hovis’s declining fortunes and Premier’s strained balance sheet, which has also prompted it to sell other well-known brands during the last decade.
Hovis is now run by Nish Kankiwala, a former Pepsico and Burger King executive.
RW Baird, the investment bank, is advising on the sale, while Houlihan Lokey is advising Endless.
Hovis and Endless declined to comment.