Amsterdam | Reuters –– U.S. commodities company Cargill said on Thursday it would bid alone for Dutch animal feed company Nutreco and pledged not to break up the business to try to capture the initiative from rival bidder SHV.
Shares in global fish and animal feed supplier Nutreco rose more than four per cent as investors warmed to the prospect of a bidding war.
Howver, Nutreco said Cargill had made no formal offer and that any bid would need to match terms of SHV’s 3.1 billion euro (C$4.4 billion) bid.
“We have not received a concrete, written proposal that is likely to qualify or evolve to a competing offer,” Nutreco said. “There is no doubt that it is clear to Cargill what will constitute a potential competing offer.”
Cargill originally said last month it would make a joint 43.20 euro per share bid with private equity house Permira, afterward splitting Nutreco’s animal and fish feed divisions into two separate companies.
SHV’s offer of 44.50 euros a share values the company at 3.1 billion euros but the Dutch family investment house also committed in its offer memorandum to making no redundancies, not breaking the company up and keeping its headquarters in the Netherlands.
On Thursday morning, Cargill changed its position, saying in a statement that it still wanted to buy Nutreco and that it would bid alone and not break the company up.
The bidding activity around the company comes amid a spate of deals in the animal feed industry as global players seek a bigger piece of the food supply chain.
One of the world’s largest listed feed companies, Nutreco has itself been trying to bolster its global position, recently buying two Brazilian feed companies to boost its emerging markets presence.
The company has operated in Canada in 2007, when it bought feed companies Shur-Gain and Landmark Feeds from Maple Leaf Foods to create a Canadian business group dubbed Nutreco Canada, headquartered in Guelph.
The two companies, between them, run livestock feed and pet food plants in Quebec, Ontario, Manitoba, Alberta, New Brunswick, Prince Edward Island and New York state, and operate 13 retail outlets in Atlantic Canada.
— Reporting for Reuters by Thomas Escritt in Amsterdam. Includes files from AGCanada.com Network staff.