Spanish food Deoleo group (controlling Italian olive oil brands Bertolli, Carapelli and Sasso) said on Wednesday April 9th that private equity firm CVC Capital Partners had made the highest offer for the 31.4 pct stake of the company that four banks (Bankia, BMN, Caixabank e Kutxabank) put on sale.
CVC bids 0.38 euro per share, below Deoleo’s current market price at the Bolsa Madrid of 0.43 euro, valuing the company at around 439 million euros , but Deoleo is trading at an enterprise value of 9.5 times 12-month core earning, a premium of 12 percent over the Spanish food sector average, according to Thomson Reuters Eikon data (see Reuters). If CVC closes the deal, it will then have to submit a full takeover offer. Deoleo’s board would meet on Thursday to review CVC’s offer, which includes recapitalisation and loans. CVC is only interested in Deoleo if it could control 50 percent or more.
CVC’s offer beated the ones from other private equity operators such as Carlyle, Rhone Capital, Pai Partners and Fondo Strategico Italiano via its IQ joint venture with Qatar Holding.
The Spanish government role in the deal is not clear yet, but in the last few day market rumor was that Madrid would not be happy if Italian investors would take control of the company. Italian Prime Minister Matteo Renzi said on Wednesday he planned to ask Spain to treat foreign firms fairly in the Deoleo bidding process. An option might be that the Spanish government could buy stakes from state-owned lenders Bankia and BMN and then draw in other big shareholders including olive cooperative Dcoop to create a pact to control the company. But this would really complicate the plans of any foreign investor,