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Mexico’s Sigma launches takeover bid for Campofrío food company

Mexican group has already agreed the purchase of 45 percent of the Spanish meat processor from leading shareholders at 6.8 euros per share, valuing the company at 675 million euros

The Mexican group Sigma has launched a full takeover bid for Spain’s Campofrío Food Group for some 675 million euros at 6.8 euros per share, Sigma said Thursday.

Sigma had already sealed an agreement with major shareholders of the processed meat group who hold a combined 45.8 percent of the company. These include the Ballvé family with a 12.4-percent stake, the US hedge fund Oaktree with 24.2 percent and Spanish lender CaixaBank with a 4.17-percent interest. The price offered to those three shareholders is the same as the takeover bid price of 6.8 euros, which represents a premium of over some 11 percent to Campofrío’s closing market price on Wednesday.

This latest move comes amid a flurry of purchase operations in Spain as foreign investors look to pick up bargains as the country emerges from a five-year crisis.  

Trading was initially suspended in Campofrío by the National Securities Commission (CNMV). After the trading halt was lifted, Campofrío’s shares were trading up 11 percent at 6.83 euros at 1.15pm.

After the operation Pedro Ballvé will remain as executive chairman of Campofrío and Sigma España.

The price offered by Sigma represents a reduced premium on current prices”

Campofrío’s shareholder structure has seen some major changes this year. Its biggest shareholder was the Chinese group Shuanghui, which acquired US firm Smithfield, Campofrío’s biggest shareholder with a 37-percent stake. However, Shuanghui has announced it would be reducing its holding to below 30 percent in order to avoid having to launch a mandatory takeover for the rest of the company’s shares.

Reuters quoted the brokerage service of Portuguese bank BPI as saying that the success of the takeover bid depends on how Shuanghai reacts, and does not rule out a counteroffer. “The price offered by Sigma represents a reduced premium on current prices,” BPI said.

Campofrío is Europe’s largest processed meat producer, with processing facilities in eight countries. For the 12 months to the end of September it had sales of 1.916 billion euros.

“The acquisition of Campofrío represents a unique opportunity to enter the European market with leadership positions, strong brands and a highly qualified management team, Sigma CEO Mario Páez said in a statement posted on the Mexican group’s website.