The acquisitive cow

22 March 2011 By Nicholas Paisner

Activist investors in the Italian dairy group have sold their shares to French rival Lactalis for a premium, lifting its stake to 29 pct. It’s easy to see why Lactalis thinks it’s buying influence. But with Rome opposed, the benefits of this costly investment may prove elusive.

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French dairy group Lactalis said on March 22 it had agreed to acquire 15.3 percent of Parmalat's shares from Mackenzie Financial Corporation, Skagen and Zenit Asset Management for 2.80 euros per share, a 13.5 percent premium to the closing price on March 21. The acquisition takes its stake to approximately 29 percent.

Lactalis revealed on March 17 it controlled 14 percent of Parmalat's shares, stating that it intended to become the company's "key" industrial shareholder. It said it would "preserve the integrity" of Parmalat while helping it expand in Italy and abroad, including through strategic acquisitions.

Italian industry minister Paolo Romani said on March 17 that he favoured the idea of an Italian consortium buying Parmalat. The Italian government is considering legislation to keep strategic companies in domestic hands.

Parmalat holds its shareholder meeting on April 1214. Lactalis has submitted a list of candidates for election to the board, including the current management of its Italian operations.

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