Lees and Patisserie Agree Settlement

Lees Foods has announced a settlement with the former directors and shareholders of Patisserie UK Ltd following a buy-out dispute.

Lees, which owns the Lees of Scotland and Waverley Bakery businesses, purchased Patisserie UK’s holding company Rock Cake in December 2007. Patisserie UK was placed in administration in March 2009 after its major customer Costa Coffee, which accounted for 75 per cent of its sales, switched to another supplier.

A spokesperson for Lees said, “The takeover was concluded on both sides in good faith at an agreed market value. However, due to unforeseen circumstances, anticipated sales did not materialise as originally forecast leading to a dispute between Lees and the former directors and shareholders of Patisserie.

“Lees is pleased to report that following a constructive process of discussion, an amicable settlement has been reached with no admission of liability on either side.”

Under the terms of the settlement, Lees will receive approximately £225,000, comprising £125,000 in cash and, in addition, all of the 65,000 Lees ordinary shares issued to the shareholders of Patisserie as part of the consideration for the acquisition of Patisserie (the “Consideration Shares”) will be transferred to Lees or at Lees’ direction.

The Consideration Shares have a market value at the current mid-market share price of approximately £100,000. The company intends to buy-in the Consideration Shares for a nominal sum and then to cancel them. A general meeting will be convened for some time in January 2010 to seek the requisite shareholder approvals to effect this.