AMSTERDAM (Reuters) - SHV, a family-owned Dutch investment firm, has reached a conditional agreement to buy animal feed and nutrition company Nutreco NUO.AS for 2.7 billion euros ($3.4 billion), expanding into food-related businesses.
The offer of 40 euros per share is a premium of 42 percent to the stock’s closing price on Friday and is conditional on SHV acquiring all Nutreco shares. It could also be terminated if a third party were to bid 8 percent or more above the offer price.
Nutreco, which had 2013 sales of 5.2 billion euros, said it had received guarantees from SHV that it would continue its growth strategy, including acquisitions, and that it would keep its headquarters in the Netherlands.
“SHV will be an excellent partner, enabling us to maintain our corporate identity, culture, values and organization,” said Knut Nesse, CEO of Nutreco.
Under the terms of the agreement, SHV, which has its roots in a 19th century coal trading company, will pay for the acquisition in cash from its own financial resources.
Explaining the deal, SHV said that Nutreco, which makes livestock, chicken and fish feed, had strong management and good growth prospects in emerging markets.
By the close of trading on Monday, SHV said it had purchased more than five percent of Nutreco’s outstanding shares, which rose 39.5 percent in Amsterdam to just below the offer price.
SHV currently operates in sectors including cash-and-carry wholesale with the Makro brand, energy distribution, transport and industrial services. It is active in 50 countries and employs approximately 47,000 people.
The offer for Nutreco, which employs 10,000 people in 30 countries, is expected to open in the final quarter of 2014 and Nutreco’s executive and supervisory boards recommended shareholders accept it, the companies said in a statement. It is subject to regulatory approval.
“It is important for SHV that it ultimately acquires the entire outstanding share capital of Nutreco,” a statement said.
“If SHV acquires 95 percent of the outstanding shares of Nutreco, Nutreco intends to delist from Euronext Amsterdam expeditiously.”
If Nutreco were to terminate the acquisition and pursue a rival deal it would pay a one-off fee of 25 million euros.
ING Corporate Finance is acting as financial adviser to Nutreco. Leonardo & Co. is acting as independent financial adviser to the Supervisory Board of Nutreco. De Brauw Blackstone Westbroek is acting as legal adviser to Nutreco.
Lazard is acting as sole financial adviser to SHV. Allen & Overy LLP is acting as legal adviser to SHV. Bain & Company is acting as strategy adviser to SHV. Deloitte is acting as tax and financial due diligence adviser to SHV.
(1 US dollar = 0.7837 euro)
Editing by Gopakumar Warrier and Mark Potter