Italian food group Parmalat rejects €3.38-bn offer from Lactalis

The board of Italian food group Parmalat yesterday rejected a  €3.38 billion ($4.92 billion) unsolicited takeover offer from family-run French dairy company Lactalis  for being too low.

Milan-based Parmalat said that based based on an analysis done by its financial advisor Goldman Sachs, the board of unanimously concluded that the offer does not reflect the value of Parmalat in the context of a change of control transaction.

The rejection was expected as Parmalat chief executive was opposed to the idea of giving full control of the company to Lactalis. The French company had paid €2.80 a share for a 15.3-per cent stake in Lactalis in March, taking its total stake in the Italian company to 29 per cent.

Lactalis's present offer of €2.60 per share is lower than the €2.80 a share it paid in March. The French company has refused to hike the offer in view of no competing bids.

Laval, Mayenne, France-based Lactalis, the world's top cheese producer, had in April made an unsolicited €2.60 takeover offer for the remaining 71 per cent stake of Parmalat, a premium of 21.3  per cent to the average traded price over the past 12 months.

The proposed takeover would catapult Lactalis to the world's top dairy group with combined revenues of €14 billion.