Sigma, the food arm of Mexican conglomerate Alfa, has launched a bid to acquire Spanish meat processor Campofrio.
Dairy-to-meats group Sigma has offered EUR6.80 per share for Campofrio, equivalent to an equity value of EUR675m (US$908m) and an enterprise value of EUR1.12bn.
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The offer represents an 18.7% premium over Campofrio’s 45-day average trading price, Sigma said. However, Campofrio shares surged 11.38% on the news, climbing from an opening price of EUR6.15 to EUR6.85 at 14:00 GMT.
Sigma, which registered the offer with Spanish regulator the CMNV earlier today, said it has already inked purchase agreements with shareholders representing 45.8% of Campofrio’s outstanding share capital.
A spokesperson for Sigma declined to reveal which investors have already signed up to the deal. However, local reports suggest Oaktree Capital, with a 24.2% stake, and Caixabank are among those who have approved the sale.
The deal also has the backing of current Campofrio chairman Pedro Ballve, who controls 12.4% of shares and is a member of the founding Campofrio family. If the acquisition attempt is successful, Ballve will come on board as a co-investor and continue to serve as chairman of the board, Sigma said.
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By GlobalDataChinese firm Shuanghui International has already signalled its intention to reduce its 37% stake in Campofrio in order to avoid triggering a mandatory offer for the Spanish meat firm, per Spanish securities requirements. Shuanghui was left with an enlarged stake in Campofrio following the firm’s acquisition of US pork processor Smithfield Foods. However, the Chinese company has not been touted as one of the investors to have already approved Sigma’s takeover bid.
Commenting on the move, Sigma CEO Mario Paez said the acquisition would provide the company with access to the European market with a stable of high-profile brands.
“The acquisition of Campofrio represents a unique opportunity to enter the European market with leadership positions, strong brands and a highly qualified management team,” he said. “We expect to build on a great platform that the company’s management, led by Pedro Ballve, has already established.”
In its most recent financial update, issued earlier this week, Campofrio nine-month EBITDA totalled EUR100m, down 3.7% on the comparable period of last year. While the company said it was feeling the negative impact of higher input costs on flat sales, it emphasised profitability has improved through the year.
Click here for our In the spotlight analysis of Sigma’s move for Campofrio.
