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Nutreco shares slip after Cargill ends bid fight


Amsterdam | Reuters — Shares in Nutreco fell last Tuesday after U.S. commodities company Cargill said it was pulling out of a bid battle for the Dutch animal feed maker.

Cargill’s withdrawal leaves the field clear for Dutch investment firm SHV, which has made an offer valuing the company at around 3.1 billion euros (C$4.4 billion). SHV said Dec. 24 it now owned 18 per cent of Nutreco’s issued share capital.

Minneapolis-based Cargill said Dec. 22 it was no longer pursuing a deal after considering “the attractiveness of acquiring Nutreco relative to alternative potential investments.”

That represented a change of heart after Cargill said earlier this month that it was interested in the business but would go it alone, rather than bidding with private equity investor Permira. [Related story]

Nutreco shares were down five per cent at 44.17 euros by 10:15 GMT on Tuesday (Dec. 23) in Amsterdam as the prospect of further rival bids faded.

SHV has made an offer of 44.50 euros a share which won the backing of the Nutreco board. SHV, which has its roots in a 19th-century coal trading company, has committed to making no redundancies, to not breaking the company up and to keeping its headquarters in the Netherlands.

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.

Nutreco, which had sales of 5.2 billion euros last year, has operated in Canada in 2007, when it bought feed companies Shur-Gain and Landmark Feeds from Maple Leaf Foods.

Now part of Guelph-based Nutreco Canada, Shur-Gain and Landmark 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 “Feeds ‘n Needs” retail outlets in Atlantic Canada.

Reporting for Reuters by Anthony Deutsch in Amsterdam. Includes files and updates from Network staff.

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