Family owned investment house, SHV, put in an offer of €40 per share for Nutreco late last month, valuing the company at €2.7 billion.
On Saturday, US agribusiness giant, Cargill, in a joint effort with private equity firm Permira, tried to trump that initial bid from SHV with an offer of €43.20 a share for the Amersfoort based feed group.
The Minneapolis headquartered company said it was exploring a deal whereby it would acquire the fish feed business and Permira would take on Nutreco’s animal nutrition activities.
Cargill could make counter offer
Gerard Rijk, analyst with SNS Securities, told us he reckons Cargill could go as high as €50 a share to secure the Dutch group.
But Nutreco management said they rejected the “expression of competing interest” from Cargill, as it would involve the disintegration of the group as a whole. They indicated a marked preference for the approach from SHV, which they stress will better serve shareholders.
The executive also said the Cargill bid was still subject to the approval by that company's board of directors and that it contained a lot of uncertainties: “The potential structure with regards to Permira's involvement was unclear."
Shareholders to decide
Despite management at the Dutch company showing reluctance to accept a deal that would entail a break-up of the group, Rijk told FeedNavigator: “In the end it is the shareholders who will decide.”
The bid from Cargill was not unexpected with both Rijk and Maarten Bakker, equity analyst at ABN AMRO, in conversation with this publication last month, making such a prediction.
“Cargill, which has been too busy integrating Provimi to develop the aqua feed side of his operations, would be attracted by the robust structure of Nutreco’s fish feed division, its broad species portfolio and extensive client list as well as the synergies to be leveraged on the animal nutrition side,” said Rijk in October.