Tate & Lyle in £2.74bn takeover talks with Ingredion

London-listed food ingredients company Tate & Lyle confirmed on Thursday that it is in discussions with U.S. rival Ingredion over a potential takeover valued at 2.74 billion pounds, or about $3.7 billion. The proposed deal, which offers shareholders up to 615 pence per share including 595 pence in cash and up to 20 pence in dividends, represents a 64 percent premium over Tate & Lyle's closing price the previous day. Shares in Tate & Lyle surged as much as 55 percent, reaching 580 pence, their highest in nearly a year.

The approach from Illinois-based Ingredion follows several earlier proposals, according to Tate & Lyle. The companies are negotiating, though the British firm emphasized there is no certainty that a firm offer will materialize or on what terms. Under UK Takeover Panel rules, Ingredion must declare its intentions by 5 p.m. on June 11 or withdraw.

Tate & Lyle, a FTSE 250 company founded more than 165 years ago through the merger of rival sugar refiners, has shifted focus from traditional sugar production. In 2010, it sold its sugar division, including the Golden Syrup factory, to American Sugar Refining for 211 million pounds while licensing the brand for continued...