PinguinLutosa NV (PIN), the Belgian producer of frozen vegetables, rose the most in more than eight years in Brussels trading after saying its board agreed in principle to sell its potato division for an enterprise value of 225 million euros ($284 million).
The shares rose as much as 3.05 euros, or 32 percent, to 12.50 euros, the biggest intraday percentage gain since August 2004. The stock traded at 11.74 euros, or 24 percent higher, at 10:31 a.m. local time.
PinguinLutosa acquired the Lutosa potato unit in 2007 for 175 million euros in cash. The company expects to sign the final agreement by the end of the month and complete the transaction by year end, subject to due diligence, antitrust approval and acceptance by the buyer, according to an e-mailed statement from PinguinLutosa. The buyer’s identity will be announced upon completion of the negotiations, the company said.
“After the transaction, Pinguin without Lutosa will be net cash positive,” Guy Sips, an analyst at KBC Securities in Brussels, wrote today in a note to investors. “We already indicated this deal as a real game changer.” Sips upgraded his recommendation on the stock to “buy” from “accumulate” and increased his price estimate to 16 euros from 9.80 euros.
The deal excludes property from 2007 that is owned by PinguinLutosa Chief Executive Officer Hein Deprez and will be sold separately by him, Deprez said today by telephone. PinguinLutosa currently pays annual rent of 5 million euros for the real estate, he said.
Dutch potato group Aviko was one of several companies interested in buying the potato business, De Standaard reported this week. PinguinLutosa on Sept. 4 said that it had received unsolicited non-binding offers for the potato division. Deprez today declined to name the buyer.
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