March 28, 2018 / 4:30 PM / 7 months ago

France's LDC submits bid for ailing poultry rival Doux

RENNES, France (Reuters) - French poultry group LDC (LOUP.PA) has submitted a takeover bid for struggling rival Doux, ahead of a bidding deadline later on Wednesday, a spokeswoman said.

FILE PHOTO - View of the French poultry group Doux site in Chateaulin, central Brittany, November 3, 2013. REUTERS/Stephane Mahe

Doux is controlled by French agricultural cooperative Terrena, which acquired a majority stake two years ago but has faced losses linked to competition from cheaper Brazilian chicken in key Middle Eastern markets.

A French government restructuring body has been holding talks with Doux’s shareholders to seek partners for the group.

The deadline to submit takeover proposals to the restructuring body is midnight local time (2200 GMT).

LDC, France’s largest poultry processor, declined to give details on its bid.

Britanny-based Doux is also planning to file for insolvency, with a business court due to hear its request next week. Union representatives at the firm said insolvency proceedings could help conclude a takeover deal.

Ukrainian agribusiness group MHP (MHPCq.L), a leading poultry producer in Ukraine, also submitted a takeover proposal this month, a spokeswoman for that group said.

Terrena, which has said Doux lost around 35 million euros ($43 million) in each of the past two years, estimates the poultry firm needs 100 million euros in investment to reorganise its business model. Terrena says it cannot bear the cost.

Doux, which employs 1,200 workers, went through insolvency proceedings in 2012 after the scrapping of European Union export subsidies sapped its profits. After shedding most of its domestic activities to focus on exports, it has struggled to compete against cheaper Brazilian poultry.

Smaller rival Tilly-Sabco, which has also been through several rescue deals in recent years after struggling to cope with the loss of EU export aid, was placed under court protection this week.

Reporting by Pierre-Henri Allain; Writing by Sybille de La Hamaide; Editing by Gus Trompiz and Mark Potter

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