French cheese giant Lactalis said yesterday it had reached a deal to increase its stake in Parmalat to 29 per cent despite a government warning of measures to keep the dairy group in Italian hands.
Lactalis, the world’s largest cheese manufacturer, said it was buying on the 15.3 per cent of the ordinary shares in Parmalat held by Zenit Asset Management AB, Skagen AS and Mackenzie Financial Corporation for €2.80 a share.
“At the completion of this transaction the Lactalis Group will have a direct and potential holding of around 29 per cent of the capital of Parmalat,” the company said in a statement in Italy at the request of the Italian stock market authority.
Trading of Parmalat’s shares was temporarily suspended on the Milan bourse, and slid three per cent to €2.38 when trading began. At midday, Parmalat’s shares were down 4.14 per cent at €2.36.
On Thursday, Lactalis announced it had picked up 11.42 per cent of Parmalat and said it planned to increase further its stake, without reaching the 30 per cent shareholding level which would oblige it to launch a full buyout offer.
That already made Lactalis the single largest shareholder in Parmalat, which had grown into a global dairy leader before collapsing in 2003 due to financial fraud by its founder Calisto Tanzi in a scandal that was dubbed “Europe’s Enron”.
Lactalis’s move triggered a vociferous response from the Italian government which vowed on Friday to take measures to protect “strategic companies”.
Economic Minister Giulio Tremonti talked at a Cabinet meeting about “French legislation on safeguarding strategic enterprises in view to future measures by the (Italian) government”, according to a government statement.
Mr Tremonti had also met French Ambassador in Rome Jean-Marc de La Sabliere intends to ensure “reciprocity of European rules” regarding acquisition of companies.
French companies have been on a buying binge in Italy recently, to the dismay of the government.
Luxury group LVMH has taken control of jeweller Bulgari, EDF is in discussion with Italian power company Edison and insurer Groupama is expected to take a part of Premafin.
In order to block Lactalis, the Italian government said it favoured an alliance of Italian companies taking control of Parmalat.
Such an alliance could centre on the bank Intesa-San Paolo, which already holds a small stake in Parmalat. The Granarolo dairy company has also expressed its interest as has Ferrero, the maker of Nutella and Kinder chocolate eggs.
Nevertheless on Monday evening Lactalis announced it had raised its direct and indirect stake in Parmalat to 13.67 per cent.
Unhappy with Parmalat’s current management under chief executive officer Enrico Bondi, the Norwegian fund Zenit Asset Management AB, Sweden’s Skagen AS and Canadian Mackenzie Financial Corporation teamed up in January to try to oust him when the company’s executive board is re-elected in April.
The funds, which had wanted to make Parmalat a global contender once again, had initially opposed Lactalis’s entry into the company.
Lactalis, which is already very active on the Italian market with its Galbani brand of mozzarella and other Italian cheeses, has also put forward its list of candidates for Parmalat’s executive board.