Olive & Oil 05/08/2013

Deoleo for sale. The company' control costs just over € 200 million

A few years ago only the purchase of the Bertolli brand had cost as the entire present value of the company, valued by JP Morgan. At the English bank business have turned some Iberian members who want to sell 33% of the giant of olive oil

Investors wanted for olive industrial oil sector.
As often happened in the past the first rumors, then more confirmed, relating to sales and clearance sales in the oil sector begins in the summer. That 2013 is no exception and the news certainly makes a lot of noise, even if it did not come completely unexpected.
Spanish banks that had saved Sos Cuetara, now Deoleo, form management of Salazar brothers now want to disengage, believing concluded the process of consolidation and also considering the high liquidity needs for the Spanish economy.
Now it's confirmed that Bankia (18.2%) and Caixabank (5.2%), but also Unicaja, Kutxabank and Banco Mare Nostrum (around 9%) would unitarily entrusted to the British investment bank JP Morgan is responsible for assessing, with a view to sale, their shares which, taken together, would be equal to 33% of Iberian giant olive oil.
An equity stake of 33% represents a control assets of the company.
Who will buy the Iberian banks handle short Deoleo.
The game is fully open and, at this point, climbing Hojblanca to Deoleo becomes more and more difficult, because it will be too complicated for the coop Spanish find more than 200 million Euros to buy the shares in the hands of banks.
The weight of Hojblanca would be diluted so much in the new shareholder structure and the influence they had to exercise may actually be reduced drastically, making unnecessary the complicated operation of entry into the capital, which was also the subject of heavy criticism and comments from the Antitrust Iberian.
But what it's worth today 33% of Deoleo? JP Morgan still not lean officially but we are talking about a figure that would vary from 210 to 280 million euro, or just over a third of what he paid for Deoleo Bertolli.
In short, with the same amount of time spent by brothers Salzars to acquire Bertolli today you can almost buy the whole company that includes brands Carapelli, Sasso, Carbonell and many others.
Why this special price? Undoubtedly a very viable and plausible explanation lies in the company accounts closed in 2012, with a loss of € 246 million and total debt of 624 million Euros, according to NewStatesman.
A situation certainly more prosperous than when the Spanish banks were forced to intervene, by converting their debt into shares of the company. Then Deoleo boasted debts of 1.1 to 1.2 euro billion Euro which, therefore, under the new managment, were halved, thanks to the sale of divisions not considered strategic.
The olive oil is still a good deal? We'll find out probably in the next few weeks will begin when the first manifestations of interest and the first abboccamenti for the purchase of shares in the hands of banks today.
And the Italians? For the time they are spectators. No item of interest unofficial for 33% of Deoleo. Not even a hint of the possibility of a consortium. The situation can evolve quickly, but credit crunch and declining sales have raised fears that the Italian brands will remain in foreign hands.

di Alberto Grimelli