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Parmalat Investors Said to Mull Pushing for CEO With Global Experience

A group of Parmalat SpA investors is considering pushing to replace Chief Executive Officer Enrico Bondi with a CEO who has more experience in the international food industry, three people familiar with the situation said.

Skagen AS, Mackenzie Financial Corp. and Zenit Asset Management AB plan to propose a new board and may press for the appointment of a CEO who will consider acquisitions for Parmalat, said the people, who asked not to be identified because the matter is private. The investors own 15.3 percent of the Italian food company, according to a Jan. 26 statement. A Parmalat spokeswoman didn’t respond to a call seeking comment.

Parmalat, which pioneered long-life milk in the 1960s, holds its annual meeting in April, when the board’s election also takes place. Any “material” changes to the board would increase the likelihood of shareholders receiving a special dividend and of the company investing more cash in mergers and acquisitions, according to Andy Smith, an analyst at MF Global.

“We’re not at all surprised shareholder activism is growing,” said Smith, who has a “conviction buy” rating on Parmalat. “Bondi has done a good job in turning the company around, but not much since. The share price has been pretty pedestrian. Parmalat is perceived as a commodity company and that’s why its multiples are so low.”

Photographer: Giuseppe Aresu/Bloomberg

Parmalat SpA Chief Executive Enrico Bondi. Close

Parmalat SpA Chief Executive Enrico Bondi.

Photographer: Giuseppe Aresu/Bloomberg

Parmalat SpA Chief Executive Enrico Bondi.

Parmalat shares have fallen 24 percent since trading resumed in Milan on Oct. 5, 2005 after a near two-year suspension that followed Italy’s biggest corporate bankruptcy. The company’s market value of 3.9 billion euros ($5.3 billion) compares with 5 billion euros when the listing was restored.

Turnaround Specialist

Bondi, a turnaround specialist, has recovered about 2 billion euros in legal settlements from banks and auditors that the company accused of sustaining a fraud that led to its 2003 bankruptcy filing. Before joining Parmalat in 2003, the 76-year- old CEO earned a reputation for turning around Italian companies ranging from Montedison SpA to Telecom Italia SpA.

Amid a decade of consolidation in the European dairy industry, Parmalat has made three purchases since returning to the stock market, the largest of which was spending about $54 million to buy some fresh milk operations from Australia’s National Foods Ltd, according to Bloomberg data.

Groupe Lactalis has tripled its sales outside of France in the past 10 years, fuelled by purchases including the acquisition of Ebro Puleva’s milk unit for 630 million euros. Lactalis also bid for all of yogurt maker Yoplait last year.

To contact the reporter on this story: Armorel Kenna in Milan at

To contact the editor responsible for this story: Celeste Perri at

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