The maker of Mr Kipling cakes and Bisto gravy will be valued at up to £975m (€1.4bn) when it floats on the London stock market, it emerged today.
RHM, formerly known as Rank Hovis McDougall, set out an indicative price range of between £875m (€1.3bn) and £975m (€1.4bn) – lower than some analysts’ predictions of more than £1bn (€1.5bn).
It said it was pleased with the level of interest shown in the flotation, which is due to go ahead in two weeks.
RHM, based at Marlow in Buckinghamshire, is one of the largest food companies in the UK and Ireland with sales of £1.53bn (€2.3bn) in the year to April 30.
Its other brands include Mothers Pride, Hovis bread, Paxo stuffing, Sharwood’s Asian sauces, Lyons cakes, Robertson’s jam and Golden Shred marmalade.
Today’s price range, valued at 228p to 285p per share, excludes more than £700m (€1bn) in debt.
RHM chairman Jan du Plessis said: “The fact that we have been able to underwrite more than £1.3bn (€1.9bn) in equity and debt highlight the market’s confidence in RHM and in its prospects for sustained future growth.”
RHM, which employs more than 16,000 staff, is being sold by private equity firm Doughty Hanson, which bought RHM in 2000 and will retain a major shareholding after the flotation.
The firm has pledged to plough £125m (€184.4m) of the proceeds from the flotation into its pensions fund to halve the deficit.
A dozen of RHM’s brands account for 77% of revenues and RHM provides own-label products for major supermarket chains including Asda, Tesco and Waitrose.
It is also a major supplier of food to Marks & Spencer, providing the retailer with chilled ready meals and desserts, celebration cakes and premium jams and marmalades.
The move comes at a busy time for the London stock exchange, with online poker group PartyGaming’s market debut valuing it at more than £5bn (€7.4bn) last week.
Conditional dealings in RHM are expected to start on or around July 19 and the shares will be made available to all investors around July 22.