Sky News can reveal that Fidelity International, which holds a 10% stake in the company, plans to vote against the 110p-a-share bid from DBAY Advisors recommended last month.

Fidelity's opposition - given the fund management giant's status - is likely to harden the views of other shareholders in Finsbury Food against the deal.

Rockwood Strategic, a smaller investor, has already criticised the size of the premium attached to the offer.

Alex Wright, portfolio manager, Fidelity Special Situations Fund and Special Values plc, told Sky News: "DBAY Advisors' offer to buy Finsbury Food Group at 110p per share undervalues the company, and Fidelity International will not be accepting the bid at this level.

"To put this offer in perspective, the bid values the company at a mere 11 times forward earnings, which is a very small premium to the 103p price the stock was trading at back in March this year.

"The company has been excellently managed by the current CEO and CFO through both Covid and recent commodity price rises.

"With large efficiency and IT investments now complete, strong future cashflow generation should provide a platform for management to continue to add value through additional bolt-on M&A.

Read more from Sky News:
UK economy grew by 0.2% in August, official figures show
Energy bills may rise by £17 a year to prevent suppliers going bust

"We continue to back the strategy at this price."

Shares in Finsbury Food closed on Thursday just below the offer price, valuing the company at about £140m.

DBAY could not be reached for comment.