Bakkavor revives IPO one week after shelving it due to 'market volatility' 

The food producer will float next week after shelving its IPO just a week ago 

Food manufacturer Bakkavor has revived its plan to float on the London Stock Exchange this month just a week after shelving it – purportedly on the grounds of “market volatility”.

The UK’s leading producer of hummus said this morning its shares will list on November 16 at a price of 180p, giving it a market cap of around £1bn – substantially lower than the minimum valuation of £1.2bn it had previously been aiming for.

The food producer, which supplies white label ready meals to all of Britain’s major supermarkets, announced it was shelving the float last Friday.

It said at the time: “Whilst the company received sufficient institutional demand to cover the offering, the board has taken the decision that proceeding with the transaction would not be in the best interests of the company, or its shareholders, given the current volatility in the IPO market.”

The Daily Telegraph understands Bakkavor was approached by investors following that decision and persuaded to revive the float – albeit at the lower price.

Bakkavor’s chairman Simon Burke said: "The board and I are delighted to welcome our new shareholders. It is particularly pleasing that our initial register has such a strong presence of well-respected long-term investors, reflecting an appreciation of the quality of the business and its long-term prospects."

The FTSE 100 volatility index, a measure of turbulence at the top of the London market, is down 38.4pc this year. The index itself has been repeatedly hitting record highs.

Ahead of the float, Bakkavor has placed around 55m new shares with institutional investors, raising net proceeds of £86m, while its current owners, Icelandic founders Agust and Lydur Gudmundsson and US hedge fund Baupost have raised £158m from the placement of 89m existing shares.

The existing shareholders will retain a combined 75pc of the company's equity and will be unable to sell their shares during lock-up periods of six months for Baupost and one year for the board of directors, which includes both of the founders.

Founded in Iceland in 1986, Bakkavor was originally an exporter of cod roe. It generated profits of £62.1m on revenues of £1.76bn last year and employs 16,500 staff in the UK.

The manufacturer was behind a "hummus crisis" earlier this year as Tesco, M&S and Sainsbury’s temporarily pulled some of its lines from their shelves after consumers complained of a "metallic taste".