Cuando el rio suena....me da que de aquí a final de año dejamos de ser accionistas y nos olvidamos de los bollos
Aryzta takeover offers seen most likely to come from PE funds
22 JUL 2020
- Balance sheet likely to deter strategic interest
- Potential bidders still eyeing piecemeal disposals, including La Breya and PrePan
- Before announcing whole-group takeover approaches, company readied sale of NA business
The most realistic buyer for the whole of food supplier Aryzta [SWX:ARYN] would be a PE fund as opposed to a strategic buyer, sources familiar with the situation and a sector banker told this news service.
Aryzta this week called an EGM for 16 September, at which it will replace board members who stood down recently and let shareholders assess any takeover bid that emerges by then. In the same EGM announcement, it said it was in talks with potential bidders for the whole company, after launching a Rothschild-led strategic review earlier. An activist investor group including Veraison Capital and Cobas Asset Management requested the EGM in May, urging the company to shuffle its board and sell assets.
Should the board get its way and have an offer on the table in time for the EGM, such an offer is likely to be from a PE fund, the sources familiar said. The firm should fetch an EV above EUR 2bn, of which much would be debt, which makes strategic suitors unlikely and better positions debt-friendly, food-adept PE funds such as KKR [NYSE:KKR] and Carlyle [NASDAQ:CG], the first source familiar said.
Aryzta
reported net debt of EUR 1.6bn at the end of FY19; its market cap is CHF 580m (EUR 930m); these figures are likely to limit its pool of suitors, a former shareholder agreed.
The hunt for a full sale seems part of a power play by the board, the first source and a second source familiar said. An acquisition by a PE fund would mean that, even with some changes to the board at the EGM, at least some of the company’s directors could arrange with the bidder to preserve their own positions under new ownership while seeing off the activists, the first source said.
Yet the activists’ aim likely remains piecemeal sales, given their belief that the firm’s parts are worth more than the sum, the second source said. Piecemeal disposals would also draw a wider range of bidders, including strategics, the first source said. At least three PE funds and three strategics are interested in buying Aryzta brands, including US-based Otis Spunkmeyer, La Breya and Fresh Start Bakeries, and Benelux-based PrePan, he said.
Absent a full takeover, Aryzta might not be averse to individual disposals; before announcing it had received approaches for the whole group, Aryzta had been readying to sell its entire North American business, the third source familiar said. This news service on 17 June reported on the rationale for a sale of the North American business.
Aryzta declined to comment. Rothschild did not respond to requests for comment.
by Deane McRobie in London, Emily Fasold in Chicago, Bhavna Kaul in New York, and Divya Grover in Delhi
