In a statement issued earlier this week, the Parma-based dairy processor announced that it had asked three independent experts, to “provide a reasoned conclusion as to the reasonableness and basic consistency (or lack thereof and/any uncovered defects) of the overall process followed by Parmalat’s Board of Directors in connection with the acquisition of Lactalis American Group.”
The experts, Mario Catteneo, Paolo Andrei and Marco Ziliotti, all featured on a panel of independent experts that recently assisted Parmalat in a pre-agreed price evaluation of the company’s May 2012 acquisition of LAG.
The announcement comes just days after Reuters revealed the details of a confidential court report by Angelo Manaresi, who was appointed to oversee the acquisition price assessment following a civil investigation into the deal.
Parmalat “displeasure” at report
In the report, which has since been published by Parmalat, Manaresi called for an additional price adjustment of $150.85m - on top of the $130m agreed between Parmalat and Lactalis last month.
This additional cut would see the LAG acquisition price lowered from the initial $904m paid by Parmalat to $623.15m.
Parmalat initially hit out at Manaresi's report late last week, expressing its “displeasure” at the exposure of “parts of a confidential document not yet reviewed by its Board of Directors”.
Following a review of Manaresi’s report, Parmalat’s board of directors concluded that his recommendation "does not provide an unequivocal indication as to the acquisition price".
The company stated that "Mr. Manaresi basically concurs with the results obtained with the discounted cash flow (DCF) method but expresses some disagreement with regard to the multiple method applied in the LAG valuation process."
Working to “best protect the Company’s interests”
Manaresi was appointed by an Italian court to oversee a pre-agreed price assessment of Parmalat’s acquisition of LAG following a civil investigation into the deal.
Along with PricewaterhouseCoopers (PwC) and an independent panel of experts, Manaresi was tasked with verifying that Parmalat’s board of directors was working to “best protect the Company’s interests.”
The civil investigation was launch on the back of concerns that the deal was pushed through by B.S.A – the majority shareholder of both companies – to drained Parmalat’s then €1.5bn cash pile.
A criminal investigation into the legality of the deal was also launched, with Parmalat company executives receiving warnings that they were the subject of an investigation into “aggravated embezzlement.”