Lactalis almost certain to secure Parmalat (and the price is right), says analyst
The Italian government had opened up state funding and allowed Parmalat to delay its AGM in a political struggle to keep Lactalis away from Parmalat and try to keep the company in Italian hands.
Deal almost sealed
But now it looks like the legal manoeuvres were made in vain as France-based Lactalis stands on the edge of gaining full ownership.
“I think the deal is now almost over,” Simone Ragazzi, an analyst at Centrobanco told DairyReporter.com. “There is no Italian list that could counter the Lactalis bid.”
Eduardo Courir, a partner at legal firm Bird & Bird, agreed that the acquisition is now nearly a done deal. “I'd say the deal is almost certain to go ahead. I would not consider a counterbid likely… It seems a bit too late for anything to have a significant chance of success.”
Lactalis is offering €2.60 a share for the 71 per cent of Parmalat that it does not already own.
A fair price?
The offer, which ends on July 8, values Parmalat at nearly €3.38bn. The Parmalat board rejected the bid in May, claiming that it did not fully reflect the value of the company.
But Ragazzi disagreed. The analyst said: “In my opinion, the valuation is fair – at this price Parmalat will trade in line with its peers.”
And with no rival bid, Lactalis is in pole position to secure control of Parmalat at its original bidding price.
Ragazzi said the acquisition would be good for both companies. “It is a good deal – there could be some cost synergies, especially in Italy and Europe, but not so much in South Africa, Canada and Australia.”
The financial analyst said Lactalis has the know-how to take Parmalat’s milk and cheese businesses forward, while its juice operation is likely to be a marginal business for the French dairy.