Lactalis takeover bid rejected by Parmalat
Advised by financial powerhouse Goldman Sachs, the board said Lactalis’ €2.60 share offer did not fully reflect the value of the company.
At the end of last month, Lactalis mounted its €3.4bn full takeover bid for Parmalat.
Lactalis had already built up its shareholding in Parmalat to 29 per cent – just short of the threshold for a mandatory takeover bid, but then decided to cross the line and offered €2.60 share to acquire Parmalat in full.
A takeover deal would create a dairy company with an annual turnover of €14bn. For Lactalis, acquiring Parmalat could offer up big synergies as there is significant cross over in the Italian and European activities of the two companies.
The Italian government has taken two steps to frustrate the Lactalis plans.
It passed a decree allowing Parmalat to delay its AGM to provide time for an Italian bid to form before Lactalis could take control of the board.
The government also made it possible for public funds to be used to protect ‘strategic’ companies and make an Italian solution more likely.
First quarter results
Meanwhile, Paramalat issued its Q1 results last week, posting a rise in net profits of 3.1 per cent to €50m.
However, EBITDA dropped by 4.8 per cent, down €7m from last year’s78.7m.
The company said this was due mainly to higher raw milk costs and damages caused by the fire at the production facility of Centrale del Latte di Roma last August.
Overall, sales volumes were up 2.3 per cent, compared with the previous year, the firm reported.
Sales of UHT milk, which account for 45 per cent of total unit sales, increased by 2.0 per cent, compared with the first quarter of 2010, while sales for pasteurized milk, which represents 34 per cent of the total sales volume, were down 2.0 per cent.