MIG kicks off round of acquisitions with country’s largest food group
A major business deal announced yesterday involving Greece’s largest food group is seen as heralding a strong cycle of restructuring in the country’s business sector. Marfin Investment Group (MIG) said it had agreed to buy 30 percent of the shares of Vivartia at -25 per share, which is valued at a total of about -550 million. The price carried a surprising 35 percent premium on the closing price of Vivartia’s share on the Athens bourse on Thursday (-18.10). Investment bank Morgan Stanley gave a target price of -19 for Vivartia a few days ago. «The agreement… marks a new period of intense growth for Vivartia which aims to become one of the leading companies of its kind in the world,» Vivartia Chairman Dimitris Daskalopoulos said in a statement. The stake acquired by MIG was sold by Daskalopoulos and Vivartia’s managing director, Spyros Theodoropoulos, who retain stakes in the company of 5.1 percent and 1.3 percent in the company respectively and remain at the helm. According to the most recent data, Daskalopoulos, who is also president of the Federation of Greek Industries, owned 26.81 percent of the company, and Theodoropoulos about 9 percent. The transfer of shares will be transacted on the Athens Exchange on Monday. According to the sale agreement, MIG president Andreas Vgenopoulos, will assume the post of non-executive vice president on Vivartia’s board. An early report yesterday of an impending deal was followed, at about 12.30 p.m., by a suspension of the shares of the two companies from trading on the Athens bourse, «in view of impending announcements of important corporate events.» And while the market awaited confirmation of the reports, circles close to the two companies referred to a «friendly buyout,» noting the close relations between Daskalopoulos and Vgenopoulos. «Size, an international presence and the successful combination of vision, competent management and capital strength now hold great significance as requirements in the globalized economy,» said Daskalopoulos. Vivartia produces frozen food, dairy products and other snacks. In April it bought leading Bulgarian dairy United Milk Company (UMC) as part of its plans to expand operations in the neighboring country. Vivartia shares have risen about 48 percent so far this year, outperforming the Athens Exchange general index, which has gained 14.3 percent in the same period. Vivartia stock trades at about 23 times estimated 2007 earnings, versus an average 22 for European peers, according to Reuters Estimates. MIG is said to have put a premium on Vivartia’s growth prospects abroad, especially in the Balkans and Eastern Europe, where it is already present. Vivartia officials said that apart from the fact that the company’s management remained in place, it was also important that the injection of new capital would help it further its expansion plans. MIG last week completed a mammoth -5.2 billion rights offering, and trading of the new shares will begin on Monday. The group is also expected shortly to announce the addition of a further -10 billion from bank loans. (Kathimerini, Reuters)
