By Christopher Bjork
MADRID--The board of Spain's Deoleo SA agreed to sell the
company to private-equity firm CVC Capital Partners, ending a
monthslong and often politically charged search for a buyer of the
world's largest olive-oil bottler.
Several Spanish banks with stakes in the maker of household
brands such as Bertolli and Carbonell will sell 29.99% of the
company to the U.K.-based firm, Deoleo announced late Thursday. CVC
had offered to buy Deoleo for EUR0.38 (53 cents) a share, valuing
the company at EUR438.8 million.
As part of the transaction, Deoleo may issue new shares that
would be purchased by CVC to bolster Deoleo's finances. CVC has
agreed to launch a takeover bid for the rest of the company once
the first part of the transaction is concluded, Deoleo said.
Deoleo accounts for 22% of global sales of bottled olive oil,
making it a prized asset in the food industry. It posted a EUR20
million euro profit last year and revenue of EUR813 million.
But a series of ill-timed acquisitions has left the company
EUR472 million in debt at a time when Spanish banks are trimming
their industrial holdings in an effort strengthen their capital
ratios and focus attention on retail banking.
The group of former savings banks that control Deoleo hired J.P.
Morgan Chase last summer to find a buyer for their stakes.
That decision drew interest from several private-equity funds as
well as Italy's state-owned Fondo Strategico Italiano and Qatar
Holding LLC, an arm of the Gulf emirate's main sovereign-wealth
fund.
The latter two teamed up to bid for Deoleo, causing an uproar
from Spanish olive-oil farmers and government officials, who
frowned on the idea of Italian control over the biggest player in a
Spanish-dominated industry but appeared to feel more comfortable
with CVC's bid.
The government in recent days said it might buy a small stake in
Deoleo to ensure a degree of Spanish control over the firm, but it
hasn't done so. In Italy, Prime Minister Matteo Renzi told
reporters that Spanish authorities seemed to have an ideological
aversion to Italian control of the company.
Not all Deoleo's large shareholders supported the decision to
sell to CVC. A cooperative of Spanish olive-oil farmers that owns
10% of the company said it "lamented" the Spanish banks' decision
to sell to a foreign fund "when there were clear alternatives in
the process giving the company a viable future with Spanish
ownership."
Write to Christopher Bjork at christopher.bjork@wsj.com
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