July 5 (Bloomberg) -- EAC A/S, the Danish meat and relocation company operating in Venezuela and Asia, rose the most in 21 months after selling its industrial ingredients unit for a price that exceeded some analyst valuations.
EAC climbed as much as 18 percent after the Copenhagen-based company said it had agreed to sell the unit to Brenntag Holding BV, a German chemicals distributor owned by BC Partners Ltd, for 1.2 billion kroner ($202 million) or 500 million kroner above the book value.
“It’s a really good price,” Rune Moeller, an analyst at Silkeborg, Denmark-based Jyske Bank A/S, said by phone. “There’s a lot of value in EAC but so far the share price has been under pressure because of what’s happening in Venezuela.” Jyske rates the shares “reduce.”
EAC’s profit dropped last year after Venezuela, where the company is the largest processed meats manufacturer, devalued its currency. Hyperinflation in the South American country also has delayed payment to the parent company of profits from the Venezuelan unit, which operates under the Plumrose brand. Before today, EAC shares had lost 27 percent in the last 12 months.
EAC rose 16.50 kroner, or 13 percent, to 143 kroner at 11:12 a.m. in Copenhagen trading, the biggest intraday gain since October 2008. The advance lifted EAC’s share market value to 1.96 billion kroner.
The industrial unit has failed to grow enough during recent years, making it less able to compete for possible acquisitions against larger global chemical distributors now entering the market, EAC said. Selling the division, which makes ingredients for paint strippers, metal cleaners, electroplating, diapers, and compressors, will enable EAC’s remaining two units, the Venezuelan operations and EAC Moving and Relocation Service, to make acquisitions, EAC said.
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