Investing.com -- Greencore Group (LON: GNC ) has reached an agreement on a potential cash-and-stock offer to acquire rival Bakkavor Group PLC (LON: BAKK ) in an improved deal that gives the company an equity valuation of about £1.2 billion ($1.55 billion), the two companies announced Wednesday.

Bakkavor shares jumped more than 6% in London trading.

The combination would create a major player in the convenience food sector, with joint revenues of roughly £4 billion. Greencore shareholders would hold approximately 56% of the merged entity, while Bakkavor investors would own the remaining 44%.

Under the revised terms, Greencore is offering 85 pence in cash plus 0.604 of its shares for each Bakkavor share.

Bakkavor shareholders would also retain the right to receive a previously declared final dividend of 4.8 pence per share. The offer values Bakkavor at 200 pence per share, representing a 32% premium over its closing price on March 13, before takeover talks became public.

Additionally, Bakkavor shareholders would receive a contingent value linked to a possible sale of the company’s U.S. operations, subject to specific conditions.

RBC Capital Markets analysts expect that the formal offer for Bakkavor by Greencore will be made prior to the April 11 deadline.

They view the potential combination as “positive, creating a UK convenience food business with combined revenue of ~£4bn, should a formal offer be presented.”

Similarly, Jefferies analysts said they feel “encouraged that a route forward has been found in relatively short order, and are increasingly warming to the value of a GNC/BAKK combination.”

“We think the potential synergies (from scale and improved utilisation) could be sufficient to make this a firmly accretive deal,” they added.

Bakkavor had previously turned down an improved offer on March 14, which valued its shares at 189 pence. That proposal followed an initial bid made on February 25, though financial details of that first approach were not disclosed.