Shunned Billionaires Said to Challenge Peru Bottler Dealby and
Arca agreed to pay $760 million for Corp. Lindley in September
Minority holders in Lindley say they were left out of deal
Some of Chile’s richest investors, including former President Sebastian Pinera, are challenging Arca Continental SAB’s takeover of Coca-Cola Co.’s Peruvian bottler, saying that as minority shareholders they were unfairly frozen out of the accord, people with knowledge of the matter said.
Fratelli Investments Ltd., owned by the Solari family, and investors tied to brokerage firm Larrain Vial are part of a group that has written a letter to Peruvian regulators asking them to look into the $910 million agreement to buy Corp. Lindley SA, said the people, who asked not to be identified because the information isn’t public. Bancard Inversiones Ltda, which belongs to Pinera, supports the action but didn’t sign the letter, a spokesman for the investment firm said. The regulator refused to confirm receipt of the letter when contacted by Bloomberg.
Mexico-based Arca said Sept. 10 that it had agreed to pay the Lindley family $760 million for 53 percent of voting shares in Corp. Lindley. Arca paid another $150 million for a pledge from the family to withdraw from the bottling industry permanently, according to a filing with Mexican regulators. The agreement froze out the owners of non-voting, or investment shares, representing about 11 percent of Corp. Lindley.
It was a lucrative deal. Arca paid $2.95 per voting share, more than three times the current value of investment shares traded on the Lima Stock Exchange. Corp. Lindley’s Chairman, Johnny Lindley, received another $1.3 million for his non-voting shares, or 89 cents a share. The stock slid 0.1 percent to 2.5 soles (77 cents) on Oct. 12.
Company directors failed in their duty to protect the rights of all shareholders, or even inform minority shareholders that negotiations were under way, one of the people familiar with the matter said.
In addition to the sale, Corp. Lindley agreed to sell land to the Lindley family for $137 million. Again, there was no transparency over the sale, the people said. There was no competitive bidding process and minority shareholders were not informed.
In a written response to questions, officials at Arca said the company had complied with all the relevant regulations in the purchase of Corp. Lindley.
Representatives for Pinera, the Solari family and Larrain Vial declined to comment, while Corp. Lindley didn’t respond to e-mailed messages seeking comment.
Pinera, who was Chile’s president from 2010 to 2014, began amassing his fortune by bringing Visa Inc. and MasterCard Inc. to Chile in the early 1980’s. He later became a leading shareholder in Lan Airlines SA, Latin America’s biggest airline.
The Solari family is one of the largest shareholders of SACI Falabella, a department store operator with operations in five Latin American countries and Chile’s largest publicly traded company with a market value of $16 billion.
In addition to Fratelli, Bancard and investors tied to Larrain Vial, the group challenging the Arca deal includes Andino Asset Management, which counts Norway’s sovereign wealth fund among its clients. Along with smaller Peruvian investors, the group holds about 41 million shares, or 6.5 percent of the company.
“We want Arca and Coca Cola to sit down and say we have certain corporate governance standards across the world -- we need to give you a fair price,” Carlos Rojas, partner and founder at Andino, said in an interview. “There are 2,600 investors in non-voting Lindley shares, and all we got was a two page press release about the sale, thank you very much.”