News: UPDATE 1-Australia's Patties Foods says gets A$230 mln bid from PEP

• PEP offers A$1.65 a share to buy Patties Foods
• Patties says takeover talks are at advanced stage
• Patties shares closed at A$1.33 on Friday

(Adds chairman comment, share price)

Australian packaged food supplier Patties Foods Ltd (PFL) said on Monday it had received a A$230 million ($165 million) takeover bid from private equity firm Pacific Equity Partners (PEP).

The non-binding and conditional cash offer was priced at A$1.65 a share, a 24-percent premium to Patties' Friday's close. PEP also held out the possibility of an "unquoted equity alternative", Patties said.

Patties, which makes frozen sweet and savoury foods including pies, sausage rolls, pastries, crumbles and cakes, in February posted a 12-percent decline in first-half net profit largely due to the recall of a frozen berry product.

The company was forced to recall a frozen mixed berries product last year amid concerns it had caused an outbreak of hepatitis A. Laboratory tests later cleared the berries of carrying the disease.

Patties on Monday said discussions with PEP were at an advanced stage, urging shareholders not to take any action against the deal.

"The board remains confident in management’s plans for growth in the core brands and the business is experiencing strong momentum," Chairman Mark Smith said in a statement.

A PEP spokeswoman declined to comment on the issue. Shares in Patties are up 16.7 percent so far this year. That compares with a mere 2-percent gain in the benchmark S&P/ASX 200 index (xjo). ($1 = 1.3924 Australian dollars)