LLOYDS Banking Group is backing a bid by managers of Lees Foods to take the macaroon and snowball maker off the stock market, but its leading institutional investor said the confectioner was worth "considerably more" than the £5.6 million on offer.

Lees directors, including chief executive Clive Miquel, have formed a new company, Randotte, which has secured £5m from part-nationalised Lloyds to fund a 230p cash offer to move Lees off the junior Alternative Investment Market.

This is a premium of 2.7% to Lees's closing share price of 224p on Thursday night and, Lees said, 12.5% more than its average share price over the past six months.

Lees said: "The management of Lees Foods believe that the proposal ... to return the company to private ownership, is in the best long term interests of the business."

Lanarkshire-based Lees listed on Aim at 200p in June 2005.

Its shares reached a high of 263p in September 2007 but traded as low as 97.5p in early 2009.

Lloyds is providing Randotte with a term loan of £2.4m until 2017 and bridging loans totalling £2.6m to be repaid by July.

Chris Hutchinson, the manager of the Unicorn Aim venture capital trust whose 5.3% stake makes it the largest institutional investor in Lees, told The Herald: "I believe the business is probably worth considerably more than the price they are paying to take it private.

"But if I was in their shoes I would probably be trying to do it at a similar level."

He said he would have liked existing investors to have been given the opportunity to participate in its future structure.

The deal needs the backing of 75% of shareholders.

Investors who own 20.2% of the company have agreed to back the offer but because the directors are barred from voting due to their interest in Randotte they account for 40.9% of those entitled to vote.

Among their number is Alasdair Locke, founder of oil services company Abbot Group, who holds 10.5% of Lees shares.

He said: "Capital markets these days do not give much benefit to small companies to be public.

"It is a reasonable offer in the circumstances and I do not want to stand in the way of the management's ambitions."

Unusually, shareholders who have agreed to back the offer are released from this obligation if another bidder offers more than 230p.

Yesterday Lees's shares closed at 231p, a 7p or 3.1% gain on the day, suggesting that at least some investors expect another offer.

Director Klaus Perch-Nielsen and Raymond Miquel bought Lees in 1991. Mr Miquel's son Clive became chief executive in 2009 after a disagreement with his father over strategy. Mr Miquel Jr has a 4.2% holding.

Lees's chairman Chris Greig died in February so, with no independent director, its adviser Shore Capital has recommended the deal to shareholders.

Lees employs 270 people at its Lees of Scotland factory at Coatbridge and Waverley Bakery at Cambuslang.

Its history dates back to 1931 when John Justice Lees, a grocer's son from Coatbridge, covered a chocolate fondant bar in coconut, thereby creating the first macaroon bar.

The likely disappearance of Lees into private hands removes yet another company with its headquarters in Scotland from the stock market.

Currently East Kilbride-based Goals Soccer Centres faces a takeover attempt by Ontario Teachers' Pension Plan. This follows the recent disappearance of Robert Wiseman Dairies, Axis-Shield and ProStrakan from the stock market.