Danone chair supports takeover transparency law

By Chris Mercer

- Last updated on GMT

Related tags: Danone

Danone's chairman appeared to defend French government proposals
for more transparency from firms during takeover rumours, in an
internal interview concerning the recent PepsiCo gossip.

Franck Riboud, also chief executive of Danone, attacked PepsiCo for going to ground during a spate of speculation that the US soft drinks and snacks firm was preparing a bid for France's dairy giant.

"What kept the rumour going was the supposed bidder's silence over several weeks. The only thing that could have calmed the market down would have been a clear denial on their part,"​ said Riboud in a rare interview published on Danone's website.

His comments seem to support proposals put forward by the French council of ministers last week to force companies involved in takeover speculation to be more open about their intentions.

The council said it was considering amending France's adoption of the EU directive on public acquisition offers so that the country's financial markets watchdog (AMF) would have the power to make any firm involved in speculation declare its intent - probably within a set time limit.

This would be done, said the council, to "ensure transparency"​ among the parties involved.

It seems little coincidence that the move comes less than three months after the apparently false rumours that PepsiCo was preparing a bid for Danone.

A flurry of speculation sent the French firm's shares soaring, only to fall back when nothing happened - prompting the AMF to launch an investigation into what, or rather who, was responsible.

"The results will show who was behind the rumours, and who benefited from speculation,"​ said Riboud, adding that media gossip over secret talks between PepsiCo and Danone were "completely untrue and I categorically deny it"​.

Riboud went on to defend the French government's flamboyant display of economic nationalism during the rumours. Top ministers, including President Jacques Chirac, rallied round Danone as one of France's "national treasures"​.

"I don't think there was anything out of place in the way the French government and politicians showed concern over the possibility of a hostile bid. Recent cases in the US, Italy and Germany show much the same attitude."

But, he said Danone did not need any help, and was not concerned that the food industry had not been included in the French government's list of 10 sectors of national importance, to be given special protection from foreign takeovers.

"I have no desire to see regulatory defence measures, and I do not want to take cover and hole up in some sort of fort behind artificial walls. I have no desire to "sanctuarise" Danone. Sanctuaries are for relics, whereas Danone thrives on the competition it faces in all its markets."

Riboud also refuted concerns that Danone was vulnerable because of its small size and lack of core shareholders.

"Danone is only a quarter or a fifth of the size of the heavyweights in our industry and we cannot seriously expect to put ourselves out of reach by getting bigger."

Related topics: Manufacturers, Danone, Consolidation

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