Bounty is offering a 50% premium on the 82c Tegel shares, offering shareholders $1.23; plus shareholders get to keep a forthcoming 4.1c dividend.
Bounty, owned by the Cheng families of Manila, wants to gain minimum share acceptance of 50%, but said yesterday it intended to launch a full, formal 100% takeover within the next 30 days.
Aside from the 50% acceptances condition, Bounty's conditions include gaining Overseas Investment Office approval and Tegel meeting earnings performance thresholds, against last year's results.
Tegel processes about 55million birds annually - half of the country's poultry.
Craigs Investment Partners broker Peter McIntyre said the takeover was a surprise, but its low share price showed Tegel had fallen out of favour with shareholders, large and small.
"Merger and acquisition activity [in general] has been at high levels.
"Any company with a waning share price should know its competitors could well be looking at them," he said.
Tegel first listed on the NZX in 2016 following a float at $1.55 per share. At 82c on Wednesday, its shares are down 21.5% on a year ago.
On reopening yesterday, following Anzac Day closure, Tegel shares initially jumped 39% to $1.14, then eased back about 2c.
"This is a loss [delisting] for the NZX, even though the share price had waned, it had a place in New Zealand food," Mr McIntyre said.
Bounty is one of the two largest poultry and food retailing businesses in the Philippines, with annual 2017 revenue of more than $750million.
Bounty president Tennyson Chen said Tegel would have the opportunity to expand into the Philippines market, while Bounty itself wanted to grow beyond the Philippines.
"We believe our group is naturally aligned to Tegel, and our offer is motivated by a desire to further grow the Bounty Fresh Group beyond the Philippines," Mr Chen said in a statement yesterday.
A company spokesperson said Bounty operated a "farm-to-market" strategy, managing the entire supply and production chain. In the past six years, it established more than 1500 Bounty-owned takeaway rotisseries.
It also had operations in egg production, pig farming and feed milling.
Tegel's board has appointed an independent subcommittee to respond to the unsolicited offer.
While noting the 50% premium on the current 82c share price, Tegel's independent directors said it was too early to comment on the offer, and counselled shareholders to seek professional advice.
"In particular, the independent directors do not yet have full details in respect of Bounty's proposed strategy for Tegel, which is something we are focused on," Tegel said in an NZX statement.
Last month, Tegel downgraded its 2018 earnings outlook citing slower progress in Australia, one-off costs ranging from compliance rule changes to restructuring and weather disruptions to its New Plymouth processing plant, BusinessDesk reported.
The company had failed to meet the earnings forecasts in its offer documents as a glut of domestic chicken constrained prices, which has seen the share price decline during the past year.
In 2014, a separate Philippine company purchased New Zealand food and biscuit manufacturer Griffins, from its then-Australian owners, for $700million. Griffins had been owned by five overseas companies during the previous 30 years.
