Lactalis launches buyout bid to delist Parmalat
Milan — France’s Lactalis, the world’s largest dairy firm, said on Tuesday it was launching a buyout offer for shares in Italian group Parmalat it does not already own, with the aim to delist the company from the Milan stock exchange.
The announcement comes as French media group Vivendi’s raid on Silvio Berlusconi’s broadcaster Mediaset has rekindled concerns about Italian companies falling into foreign hands.
Lactalis for years denied speculation that it planned to delist Parmalat, which was relaunched in 2005 after going bankrupt following a financial scandal two years earlier, to have free rein in running the group.
In a statement on Tuesday, Sofil — the investment vehicle of the Besnier family that owns Lactalis — said it would continue to support Parmalat’s growth, adding that this goal would be easier to reach with a smaller shareholder base.
Shares in Parmalat, based outside Parma and best known for its long-life milk, jumped more than 10% on Tuesday to touch their highest level in more than nine years.
By 11:00am, they hovered around 2.82 euros, a notch above Lactalis’ bid price of 2.80 euros per share.
"Some investors may be thinking of keeping the shares to trigger an upwards revision but 2c (above bid price) is nothing," a Milan-based trader said.
In the statement, Sofil said the buyout offer targeted 12.26% of Parmalat. The price represents a premium of 8.5% on Parmalat shares’ closing level of December 23.
Lactalis took control of Parmalat, Italy’s biggest listed food company, in 2011 in a deal that triggered fears in Rome over foreign takeovers. However, an Italian counter-bid for the food giant failed to emerge.
That takeover remains to this day a sore point with investors and the Italian government.
Criticism mounted after a big chunk of Parmalat’s cash pile was used in 2012 to buy Lactalis’s sister unit LAG, a US cheese manufacturer, leading to an investigation into the deal.
The civil part of the case was shelved by an appeals court in 2014, although a related criminal probe is still open.
Parmalat was founded in 1961 but collapsed at the end of 2003 with a $14.63 billion hole in its accounts, following a scandal that forced management to seek bankruptcy protection and triggered a criminal fraud probe. A streamlined version of the dairy group relisted in 2005.
With operations in 24 countries, Parmalat last year generated revenues of 6.42 billion euros and core earnings (EBITDA) of 444.5 million euros.