With one refusal and two blockades, the companies of the so-called Grupo Empresarial Antioqueño (GEA) emphasized for the third time to the banker Jaime Gilinski that they are not willing to accept the Public Acquisition Offer (OPA) that he is making for the shares of Sura and Nutresa.
The celebration this week of the extraordinary shareholders’ meetings of Sura, Argos and Nutresa, in which the possible conflicts of interest of the members of their boards of directors to make a decision regarding takeover bids were discussed, are just another chapter in the fight for control of the GEA, which Gilinski unleashed last November, when he launched his offer for the majority shareholding of the food conglomerate.
The ventures by Nutresa and Sura shook the Colombian stock market late last year when unsolicited offers were made in what was considered a hostile takeover. But, there are those who consider that the succession of offers and the variations in the prices to be paid denote a strategy of intimidation against the administrators of the GEA companies and their shareholders.
“The pension funds sold the shares due to psychological intimidation and liquidated those investments at around $30,000. And the purpose of the offeror is to force those who manage these companies to sell to him”, they added.
Pressure
Grupo Argos, owner of 27.86% of Sura and 9.88% of Nutresa, held an extraordinary shareholders’ meeting on Tuesday in which the conflicts of interest of five of the seven members of the board of directors were raised.
With this authorization, Rosario Córdoba, Armando Montenegro, Jorge Alberto Uribe, Claudia Betancur and Ana Cristina Arango deliberated and decided that Grupo Argos will not accept the takeover bids.
“Taking into account the technical and strategic analyzes presented by JP Morgan and other advisors, among other considerations, the board decided not to participate in the offers for Sura and Nutresa,” reads the statement published yesterday by the Financial Superintendence.
Although EL COLOMBIANO tried to know the details of the analyzes carried out by the board and the consultants of the infrastructure holding company, at the close of this edition there was no response.
At this juncture, Semana, a media outlet whose owner is Gilinski, reported that after this refusal, minority shareholders of Grupo Argos would file lawsuits against the independent members of the board of directors, in charge of making that determination. This newspaper contacted Rosario Córdoba, president of the board, but she avoided making a statement on the matter.
In another section of the statement, Argos noted that it will continue to accompany Sura and Nutresa to materialize a series of initiatives aimed at maximizing value for all shareholders, among which the linking of strategic partners stands out.
“Grupo Argos reiterates its commitment to its shareholders so that they are the ones who perceive the fundamental value of the company and its investment portfolio,” the note concluded.
With the prices that the OPA will pay for the shares of Nutresa and Sura, US$12.58 and US$9.88, respectively, the acceptance would represent Grupo Argos some US$1,853.6 million.
Why Nourish?
The cross support structure or keiretsu implemented 40 years ago by the GEA as a defensive strategy against hostile takeovers could end up paying off for Gilinski. In the opinion of analysts at BTG Pactual, if a company falls, the entire system would collapse like a house of cards.
“In the event that the Gilinski family obtains control of Nutresa, it will immediately take control of the shares that this company owns in Sura and Argos, making it the most influential shareholder of Sura and its respective subsidiaries (including Bancolombia). And if it controls the majority of Sura’s votes, it will gain influence over the shares that this holding company owns in the Argos and Nutresa groups,
thus making Gilinski the largest shareholder of Grupo Argos and its subsidiaries,” BTG researchers explained.
Gilinski’s insistence on gaining the majority shareholding in the food group is evident not only by launching three consecutive takeover bids for the company’s shares, but also in the price increases he has made in the different offers: in the first in the US $7.71, in the second US$10.48 and in the third, which will be open until May 16, US$12.58.
Since last April 6 and until yesterday, the stock exchange recorded 160 acceptances by Nutresa shareholders interested in selling in this third OPA, which correspond to 349,519 species, that is, 0.08% of the outstanding shares. Gilinski aspires in this round to at least 9.6%.
In addition, in his speeches on Tuesday and Wednesday at the extraordinary meetings of Argos and Sura, Gilinski emphasized that these companies should sell them the titles they own in Nutresa.
And it is that the matrix of emblematic Colombian brands such as Noel, Zenú, Doria, Jet or Crem Helado, has been the object of desire of investors outside of Antioquia, for about 50 years.
This is how, in the 1970s and 1980s, the Aliadas, Santo Domingo and Grancolombiano groups tried to acquire the majority shareholding of the then Compañía Nacional de Chocolates.
“Now Gilinski is trying to take control because Nutresa is the easiest listed company to negotiate with. But, you won’t be able to do it with the values you’re offering, and you’re definitely going to have to stay in the the status quoamong other things, because no one can force Sura and Argos to sell the species they own in Nutresa”, assured minority shareholders of the food company.
Additionally, they defended the structure of cross-ownership or castling of the GEA companies, largely supported by the two-type investment model: permanent and negotiable.
“These companies have held these blocks of shares for a long time as permanent investments, that is, strategic investments that are not bought or sold. They are like a kind of concerted heritage, which constitutes institutional support for the development of various activities, including financial activities (banking and insurance)”, they commented (see Opinion).
Surah until monday
While Gilinski’s insistence is focused on Nutresa, the third takeover bid for Sura’s shares is also advancing on the BVC, but the acceptance period will last until April 25.
The stock market reported that in this round it has received 665 acceptances from holders of Sura shares willing to sell to JGDB Holding, a Gilinski company that is the owner of the takeover bid.
These lots represent 3.66 million Sura shares, or 0.78% of the company’s outstanding shares. The target is a minimum of 5.2%, with a price of US$9.88 per share.
It is worth noting that in his messages at the Sura and Argos shareholders’ meetings, Gilinski was emphatic in requesting that the takeover bid for Nutresa be accepted.
In fact, yesterday at the extraordinary meeting of Nutresa, owner of 13.07% of Sura, the banker was not present, while the participants in the early voting did not raise the conflicts of interest for six of the seven board members. That this offer has not been extended, that the price has not been raised and Gilinski’s silence about it in particular also sends a message.
In this context, the company’s board of directors indicated that it does not have the necessary quorum to deliberate and decide on the takeover bid for Sura.
Something similar happened on Wednesday at the Sura assembly, the governing body was left without a quorum to decide on the takeover bid for Nutresa.
$46.900
Grupo Nutresa share price on the Colombian Stock Exchange (BVC).
45,4%
adds the shareholding of the Sura and Argos groups in Nutresa.
457,75
million shares of Grupo Nutresa are in circulation in the Colombian market.