Ulker Drops as Owner Struggles to Allay Turkey Flight Rumors

  • Yildiz Holding announced share sale to UK-based Pladis Friday
  • Shares fell 6 percent to lowest level since August 2015

Shares in Turkey’s premier snack maker fell to the lowest level since August 2015 as traders dismissed reassurances by its founder that a stock sale to a London-based unit has nothing to do with the government’s post-coup crackdown.

Ulker Biskuvi slid 6 percent to 15.43 liras at the close of trading in Istanbul, marking the biggest decline in six weeks. The company, which owns brands including Godiva Chocolates, United Biscuits and DeMet’s Candy, is the biggest listed unit of Istanbul-based Yildiz Holding, the third-largest snacks maker in the world. Yildiz said on Friday that it would sell 21 percent of Ulker shares to its British umbrella company, Pladis, as part of a strategy to unite its assets in the snack category.

The sale sparked speculation that the holding company is protectively moving assets out of Turkey, which has seen hundreds of businesses seized or investigated under emergency law since a botched coup attempt in July. Chairman Murat Ulker has repeatedly rejected speculation about the motivation for the sale in numerous postings on his Twitter and Instagram accounts.

“We utterly reject the false and malicious claim carried by certain news organizations that our recently announced sale of a 21 percent share in Ulker Biskuvi to Pladis is, in any way, related to the coup attempt in Turkey of July 15, 2016,” Yildiz Holding said in an e-mailed statement to Bloomberg on Tuesday. “Any report that this purely business-related decision had anything to do with political or economic insecurity in Turkey is a fabrication.”

Unidentified Conglomerate

Ulker’s decline on Tuesday reflects how Turkey’s post-coup purges are impacting business, with investors questioning how deep they’ll go and who’ll be targeted next. The government accuses U.S.-based cleric Fethullah Gulen and his supporters of plotting the attempt to topple President Recep Tayyip Erdogan, and tens of thousands of people have been jailed, fired or investigated in its wake.

A columnist in the pro-government Sabah newspaper on Nov. 11 accused an unidentified Turkish conglomerate of financing Gulen operations, and some speculated that the description of the company pointed to Yildiz Holding. Yildiz promptly rebuffed the speculation before announcing a plan to buy back shares from the market.

“The stock is suffering as the company fails to disperse rumors,” Burak Cetinceker, a money manager at Strateji Portfoy in Istanbul, said by phone on Tuesday. “The rumor particularly spooks investors as it reminds them of the speculation from November, which sent Ulker shares tumbling.”

Yildiz announced in June that it would unite its snack units, including Ulker, Godiva, United Biscuits and DeMet’s, under Pladis’s roof. On his Instagram account on Tuesday, Murat Ulker posted a screen grab of a Reuters story saying the decision was motivated by business rather than domestic politics, along with the comment, in mixed Turkish and English: “That’s it. This is the truth.”

Ulker fell as much as 9.5 percent before closing 6 percent lower at 15.43 liras, the lowest since August 2015. Yildiz’s private equity unit Gozde Girisim Sermayesi Yatirim Ortakligi AS and grocery wholesaler Bizim Toptan Satis Magazalari AS also fell, dropping 4.4 percent and 3.6 percent, respectively. Yildiz’s three listed companies are the worst performers in the quarter to date on the benchmark Borsa Istanbul 100 Index.

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