Investor pushes for private equity takeover of SSP Group

An activist investor is reportedly encouraging private equity firms to enter takeover bids for Upper Crust operator SSP Group, after raising its stake in the company.

According to The Financial Times, Irenic Capital Management is pushing the move having raised its stake in the food-to-go operator to 3%, up from its previous stake of 2%.

The New York-based fund has reportedly shared pitches about the benefits of a buyout with investment bankers and private capital firms in recent weeks, according to a pitch deck seen by the paper.

The pitch deck argued that SSP could be valued at a 50% premium to its market value in a take-private deal.

It also highlighted SSP’s predictable revenues, as well as its potential to grow in US airports and generate capital through the sale of non-core assets.

According to The Financial Times, it is still possible that none of the private equity groups being pitched to will decide to make a bid.

SSP told Catering Today: “We welcome the feedback and views of all our investors. We are entirely focused on delivering progress against our clear strategic priorities in order to deliver sustainable growth and returns for all of SSP’s stakeholders.”

Irenic declined to comment.

SSP operates food outlets in railway stations and airports, including Upper Crust, Caffè Ritazza and franchised outposts of M&S Simply Food and Burger King. 

Earlier this year, SSP Group reported a 6% rise in sales in the third quarter of its financial year, helped by growth in Australia, Egypt and Malaysia, but warned of softer trading in the UK and Asia.

UK sales increased 7% thanks to strong Easter trading, though SSP said the cyber incident at Marks and Spencer in April had temporarily hit sales.

According to SSP, it had accelerated cost-cutting and efficiency measures in anticipation of weaker demand in the second half of the year. The group maintained that it was on track to deliver results within its full-year forecasts at constant currency.