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Nutreco rejects Permira-Cargill offer

The Dutch animal feed producer rejected last week’s joint bid by private equity house Permira and global agribusiness Cargill. Dutch investment firm SHV is left in the running.

Animal feed producer Nutreco has rejected a joint takeover bid by Permira, the private equity firm, and Cargill, the agribusiness multinational.

The partnership’s offer was to buy the total share capital of the Amsterdam-listed company for €43.20 a share. The plan was then to split the company with Cargill taking Nutreco’s fish feed business – Cargill already has substantial fish feed operations – and Permira taking the animal feed business, where the firm has a successful track record.

Nutreco rejected the offer on the grounds that a break up of company was not acceptable to shareholders and the share price offer undervalued the company.

In the wake of the rejected offer, SHV, a Dutch privately-held trading firm with interests in transport, retail, oil and financial services, increased a previous €40 offer to €44.50 per share. This offer has been recommended by Nutreco’s board and is currently under consideration by shareholders. An outcome is expected in the first or second quarter of next year.

Commentators are not ruling out another bid from Cargill and Permira, although are doubtful their offer with be accepted. Nutreco has been private equity-backed in the past. Cinven, a London-headquartered investment firm, and Baring Capital Partners jointly owned the company between 1994 and 1997. Nutreco listed in 1997, valuing the company at $50 million.

APG, the Dutch pension provider, is an existing shareholder in Nutreco and owns 10 percent.