Lactalis Makes $4.9 Billion Bid to Acquire Outstanding Shares of Parmalat
Lactalis to Buy Rest of Parmalat in 3.4 Billion-Euro Offer
Giuseppe Aresu/Bloomberg
A shopper pushes a cart past Parmalat products on display at a supermarket in Parma.
A shopper pushes a cart past Parmalat products on display at a supermarket in Parma. Photographer: Giuseppe Aresu/Bloomberg
Groupe Lactalis, France’s biggest cheesemaker, offered to pay 3.38 billion euros ($4.9 billion) in an unsolicited bid for the 71 percent of Parmalat SpA (PLT) it doesn’t own to create the world’s largest dairy company.
Lactalis will offer 2.60 euros per share, a 12.5 percent premium to the April 21 closing price, according to a stock- exchange statement today. Shares of Parmalat, Italy’s biggest dairy company, jumped as much as 12 percent to the offer price in Milan.
“We have an ambitious growth plan for Parmalat, making it the Italian company of reference in the dairy market,” Emmanuel Besnier, Lactalis chairman, said in the statement. The combined business would have sales of about 14 billion euros and may also make additional acquisitions, Lactalis said.
Lactalis’s offer came just before Prime Minister Silvio Berlusconi and French President Nicolas Sarkozy met in Rome after bilateral disputes over immigration and corporate takeovers added strains to European unity. The two leaders pledged to create large French-Italian companies capable of competing on global markets and played down Italy’s recent attempt to thwart Lactalis’s investment in Parmalat.
“I don’t consider Lactalis’s bid as hostile,” Berlusconi said at a press conference with Sarkozy. The Italian premier said he favors Italian investors remaining in Parmalat, while Sarzozy said he’s confident a common “solution” for Parmalat can be found.
‘Strategic’
The Laval, France-based company is seeking to take over Parmalat after buying a stake for 2.80 euros a share from a group of activist investors, a move that prompted the Italian government to curtail foreign takeovers. Chief Executive Officer Enrico Bondi had built up 1.4 billion euros in cash by winning settlements from the company’s former creditors following Parmalat’s bankruptcy, Italy’s biggest.
After Lactalis’s purchase the Berlusconi government adopted a series of measures to block Lactalis from transforming its 29 percent stake into management control of Parmalat. Italy last month authorized the Finance Ministry to invest in companies deemed strategic, including Parmalat. The measures were announced less than a month after Paris-based LVMH Moet Hennessey Louis Vuitton SA agreed to buy Rome-based luxury jeweler Bulgari SpA. Lactalis has pledged to keep Parmalat’s headquarters and management in Italy.
Counterbid
Investors led by Cassa Depositi e Prestiti SpA, Italy’s state lender, Intesa Sanpaolo SpA and Mediobanca SpA were considering bidding for the Parmalat stake not owned by Lactalis, newspapers have reported. A bid wouldn’t include Granarolo SpA, Parmalat’s biggest Italian rival, daily la Repubblica reported today. A spokesman for Intesa Sanpaolo declined to comment. A spokeswoman for Mediobanca wasn’t immediately available to comment. A spokesman for Parmalat declined to comment on the Lactalis announcement.
“We believe that the Lactalis operation is not likely to be challenged by Italian investors,” said Marco Baccaglio, an analyst at Cheuvreux who rates the stock “underperform.” A counterbid by an Italian group “is quite unlikely,” he said.
Lactalis, the maker of President cheese, has made at least 15 purchases since 2005, including the 2006 acquisition of Italy’s Galbani SpA, according to Bloomberg data. The company generated about 60 percent of its revenue outside of France, according to its website.
Parmalat shares traded at 2.57 euros as of 2:24 p.m. in Milan. The stock has jumped 25 percent this year.
Credit Agricole SA, HSBC Holdings Plc, Natixis and Societe Generale SA will provide funding for the bid for the Italian dairy company, Lactalis said.
To contact the reporter on this story: Elisa Martinuzzi in Milan at emartinuzzi@bloomberg.net
To contact the editor responsible for this story: Edward Evans at eevans3@bloomberg.net
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