Shareholders in Nutreco have called on the Dutch fish and animal feed group to open its books to Cargill and Permira, the potential contenders to a recommended €3bn bid by SHV Holdings.
The absence of a competitive auction for Nutreco has frustrated investors, many of whom were taken by surprise when the group announced last month a recommended offer from Dutch conglomerate SHV at €40 a share, valuing the company at €2.7bn.
SHV, owned by the Fentener van Vlissingen family, only increased its cash offer for Nutreco to €44.50 a share after the fish and animal feed company’s board rejected an informal joint approach by US commodities trading group Cargill and private equity firm Permira at €43.20 a share.
Nutreco objected to Cargill and Permira’s plans to break the group into two, adding there was a lack of detail on matters including funding.
However, two of Nutreco’s top-five shareholders have called for the group to allow Cargill and Permira to conduct due diligence, in order to put them in a position to make a binding offer.
APG, a leading Dutch pension fund manager, with a near 10 per cent stake, said: “All shareholders would benefit for management to offer a level playing field [to Cargill and Permira],” adding: “If the end result is a sale of the company, of course we would like to have as good a price as possible.”
APG’s view was supported by Hengistbury, a London-based hedge fund, with about a 3.5 per cent stake in Nutreco. “As with any situation like this, we think it’s important that there is a level playing field,” said the firm’s partner Daragh Horgan.
The VEB, the Dutch retail shareholders’ association, also said Cargill should be allowed the opportunity to make a “serious indicative offer” by conducting due diligence.
The association represents shareholders with a stake of less than 1 per cent in Nutreco, but has an influential role in swaying public opinion. Jasper Jansen, the VEB’s senior economist, said the association was unconvinced SHV’s €44.50 offer was adequate, adding: “We believe it is inappropriate that Nutreco runs into the arms of SHV.”
Both VEB and Hengistbury said SHV’s latest offer undervalued Nutreco.
Nutreco dismissed the shareholders’ calls for it to open its books to Cargill and Permira. It highlighted how it had an agreement with SHV under which it would only consider an indicative offer that is 8 per cent higher than the current bid by the Dutch conglomerate.
Nutreco also highlighted how SHV’s bid terms include not breaking up the company, maintaining the corporate culture and keeping the headquarters in the Netherlands.
Cargill and Permira declined to comment on whether they would take the step of making an offer worth €48.06 a share, or 8 per cent more than SHV’s bid. Cargill’s acquisitions to date have always been agreed with the targets.
SHV has been buying Nutreco shares on the open market, and last week announced it owned a 15 per cent stake, making it the largest shareholder.