Nutreco's rising share price indicates expectation of another Cargill bid
Shareholders could expect the share price of Nutreco, the Dutch animal feed producer, to rise further as Cargill is expected to retaliate against SHV's bid, het Financieele Dagblad reported, citing analysts.
SHV upped its bid to EUR 44.50 per share on Monday, in retaliation to a bid by US agrifood company Cargill and private equity firm Permira, who had offered EUR 43.20.
Investors seem to be anticipating a counter offer, as Nutreco’s shares are currently trading at more than EUR 45, the report said.
Analysts pointed to synergy opportunities from Cargill merging its Provimi division with Nutreco’s animal feed division. This would also allow Cargill an entry point into the fish feed market, which has healthy growth prospects. One possibility would be Cargill keeping the fish and animal feed parts and Permira taking on the struggling operations in Portugal and Spain, the report said.
SNS Securities analyst Gerard Rijk calculated a price of EUR 47 per share, based on growth prospects and previous takeovers, as well as Nutreco’s debt.
As both Cargill and SHV are family businesses, which don’t need an immediate return on their investment, a EUR 50-per-share offer is a definite possibility, the report said.
Het Financieele Dagblad