CSM NV, the world’s biggest maker of bakery ingredients, rose the most in more than 22 years after saying it will sell U.S. and European bakery-supply units to fund the Purac and Caravan bio-based ingredients brands’ growth.
CSM jumped as much as 32 percent to 14.45 euros, the biggest intraday gain since at least Oct. 3, 1989, and traded up 22 percent at 10:56 a.m. in Amsterdam, valuing the Diemen, Netherlands-based company at 939 million euros ($1.22 billion).
CSM, which has been struggling with weakening consumer demand and rising costs of raw materials, said in October that it would implement a 50 million-euro reorganization as earnings were missing targets. The bakery-supply units’ first-quarter earnings before interest, taxes, amortization and one-time gains or costs fell 28 percent, slower than the 19 percent earnings decline for Purac.
“The divestment is a major announcement for CSM, one that was eventually expected, but clearly not this quickly,” Richard Withagen, an Amsterdam-based analyst at SNS Securities, said in a note today. The proceeds of the divestment could be as much as 1.7 billion euros, Withagen said, who has an “accumulate” on the stock.
CSM said it also plans to use proceeds to reduce debt and may return some of the money to shareholders.