Ceres, the Mayfair Equity Partners backed owner of the Promise gluten free and Gallaghers Bakehouse brands, is lining up a bid for rival Pat the Baker and Irish Pride.
Mayfair declined to comment when contacted this weekend.
Promise is the leading gluten-free bread brand both here and in Canada, and is among the top sellers in the UK.
Longford-based Pat the Baker, which is owned by the Higgins family, has been a consolidator in the market before, buying the Irish Pride bakery business out of receivership in 2015 for €4 million.
Data at the time put the combined market share for Pat the Baker and Irish Pride at 18.3 per cent, just behind the market leader Brennans, on 25 per cent.
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Promise and Gallaghers Bakehouse, which features the Donegal singer Daniel O’Donnell in its adverts, posted sales of €68 million in the 18 months to the end of last year, and an operating loss before tax and exceptional items of €4.7 million.
Mayfair acquired a majority stake in Gallaghers Bakery in Ardara, Co Donegal, in 2017, in a deal that valued the company at €45.2 million.
The Gallagher shareholders, including the managing director Declan Gallagher, received €29 million in cash and €16.2 million in loan notes, a type of deferred consideration.
