Patties Foods, the maker of brands such as Nanna's and Four 'N Twenty pies, has agreed to a $232 million private equity takeover bid.

The Bairnsdale, Victoria-based company revealed earlier this week that Pacific Equity Partners (PEP) had approached it with a $1.65 per share offer, which values Patties at $231.8 million.

Patties has been vulnerable to a takeover since a food safety scare last year saw it recall many of its frozen berry products.

The company was already struggling, with a profit fall in the half-year before its product recall, and its shares touched a low of $1.05 earlier this year.

Just ahead of the bid, Patties shares were trading back up around $1.65.

Patties said it has now entered into a scheme implementation deed with Pacific Equity Partners' "BidCo", which will see it own 100 per cent of the food manufacturer.

The $1.65 per share offer includes a $0.25 per share special dividend which could give shareholders up to 10.7 cents per share in tax benefits from franking credits, depending on their marginal tax rate.

Patties directors are unanimously recommending that shareholders vote in favour of the takeover, unless a superior offer emerges and subject to an independent expert recommending the deal.

"Whilst the board remains confident in management's plans for growth and innovation in the core brands and the business is experiencing strong momentum, the scheme represents an attractive value for shareholders," said Patties chairman Mark Smith.

Members of Patties' founding Rijs family, who together control 36.6 per cent of the company, are backing the deal unless a better offer comes along.

PEP's managing director David Brown has given an early indication that Patties food manufacturing would continue in Bairnsdale.

"We acknowledge the very important role Patties Foods plays in the local community at Bairnsdale and we look forward to supporting that ongoing relationship," he said in a statement.

The offer is in cash, but Pacific Equity Partners is giving the option for Patties shareholders to retain an equity interest in the business if there is enough demand for it.

Shareholders will get a chance to vote on the scheme at a meeting in late August.