Battle to acquire Arab Dairy rages on as Pioneers Holding ups bid
The Egyptian Financial Supervisory Authority (EFSA) yesterday announced it had approved a request from Pioneers Holding to increase its November E£56 (US$7.83, €6.63) per share bid .
Its offer now stands at E£59.20 (US$8.28, €7.00) per share for 60.2% of Arab Dairy, a company it already controls a 16% interest in.
The improved offer tops the E£58 (US$8.11, €6.86) per share bid lodged by El Nour Dairy Products, a subsidiary of French dairy Lactalis, in December.
A majority of Arab Dairy shareholders have already accepted El Nour's offer, it was reported in Egypt. If accepted by all Arab Dairy shareholders, the deal would be worth around E£348m (US$46.7m, €41.2m).
El Nour was among a coalition of Middle Eastern Lactalis businesses that tabled a E£66 (US$9.23, €7.81) per share offer in November 2014.
After a period of due diligence, however, El Nour, on behalf of Lactalis, lowered the offer.
Arab Dairy, which is best known for its Panda cheese brand, currently controls the seventh largest share of the US$843.9m (€684m) Egyptian cheese market (Euromonitor).
The business has in recent months drawn interest from a host of companies, including European dairy cooperative, Arla Foods.
In December 2014, after a period of due diligence, Arla decided, however, not to press on with its non-binding E£65 (US$9.09, €7.69) per share bid.
“Our conclusion, based on the due diligence, is that we shall not place a final tender for Arab Dairy,” said Finn S Hansen, executive vice president of Arla’s international business, at the time.
He said, however, that the Egypt, where dairy sales are forecast to grow from US$2.1bn (€1.7bn) in 2014 to US$4.77bn (€3.87bn) in 2019, was “still an interesting market” for Arla.