April 30, 2018
Bounty Fresh attempts acquisition of New Zealand's Tegel Group
Poultry company Bounty Fresh Food Inc has mounted a NZ$437.8 million (US$309.4 million) cash offer for New Zealand's Tegel Group Holdings Ltd, in what would be the biggest outbound deal from the Philippines in almost two years.
The bid was priced at NZD1.23 (0US$.87) per Tegel share representing a 50% premium to April 24's close. It comes amid sustained pressure at the New Zealand firm which has suffered a depressed share price and missed earnings forecasts due to a glut in domestic chicken supplies.
In a filing with the New Zealand Stock Exchange, Tegel's 45% shareholder, Claris Investments, said it had accepted the offer.
A spokesman for Bounty's mergers and acquisitions said the bid was part of an expansion strategy for Southeast Asia.
"We have operations now in Malaysia, Indonesia and the Philippines - this brings another country into our grasp," the spokesman said.
He said Bounty Fresh had not yet conducted due diligence, but that the aim was to get Tegel "back (up) to speed."
In March, Tegel forecasted a profit (for the year ending April) of NZD25 million (US$18 million) to NZD27 million (US$19.1 million), from NZD31 million (US$22 million) in 2017.
Last week, Tegel said it was too early for its independent directors to comment on the offer.
"In particular, the independent directors do not yet have full details in respect of Bounty's proposed strategy for Tegel, which is something we are focused on."
Tegel shares rose 37% on April 26 to close at NZD1.12 (US$1.05).
The deal would be subject to approval from New Zealand's Overseas Investment Office which regulates inbound foreign investment.
Reuters data showed that a Bounty acquisition of Tegel would represent the largest outbound purchase by a Filipino company since Universal Robina Corp bought Australia's Consolidated Snacks Pty Ltd in August 2016 for about US$454 million.
Tegel is New Zealand's largest exporter of chicken and is responsible for more than half of the country's poultry production.