Kingsmill owner confirms talks with Hovis parent company over bread takeover

“We are evaluating strategic options for Allied Bakeries against this backdrop and we remain committed to increasing long-term shareholder value,” it said.

It comes after reports over the weekend that Endless and AB Foods, which also owns Primark, were negotiating a deal.

The takeover would bring Kingsmill and Hovis, two of the UK’s best-known and oldest supermarket bread brands, under one roof.

High inflation in recent years combined with changing consumer habits have led to bread companies struggling with sales.

Allied Bakeries was founded in 1935 and has bakeries and depots stretching from Glasgow to London.

Hovis, which was founded in 1890, was bought by Leeds-based Endless in 2020 from Premier Foods, which owns the Mr Kipling brand.

The deal would likely attract the attention of the Competition and Markets Authority (CMA), as it would combine two of the biggest bread makers in the country behind the market leader, Warburtons.

However, the CMA is under its own scrutiny from the Government, which earlier this year removed chairman Marcus Bokkerink as part of a bid to make it more focused on promoting economic growth.

Endless has offices in Leeds, London and Manchester and aims to support buyouts, non-core acquisitions from larger groups, transformations and financial restructurings.

Last month, Associated British Foods said it saw “weaker sales” across the budget fashion chain Primark’s UK and Ireland stores in recent months.

However, it indicated trading has improved in recent weeks on the back of better weather conditions, helping to boost sales of spring and summer clothing.

Speaking last month, George Weston, chief executive of ABF, told the PA news agency that it is witnessing “significant” increases in labour costs after increases to national insurance contributions and wage rises but plans to keep prices flat.

“We went nine years without moving prices before inflation forced us to change pricing a couple of years ago, but since then we have brought down the price of kids’ clothing,” he said.