Almarai to take over poultry firm Hadco

TWITTER
FACEBOOK

Reuters | Riyadh, 1 July 2009

Saudi-based dairy firm Almarai Co. said on Wednesday it has reached an agreement to buy all shares in Hail Agricultural Development Co (Hadco), moving into the lucrative Saudi poultry business.

Almarai, which is the Gulf's largest dairy firm, said in a statement that its bid, accepted by Hadco's board, values Hadco shares at 30.1 riyals ($8.03) each, which is 3.4 percent above Tuesday's close.

For each five Hadco shares, shareholders will get one new Almarai share and 2.5 riyals. This means Almarai will issue 6 million new shares, which represents a 5.5 percent capital hike.

"The deal values Hadco at about 949.5 million riyals," Almarai said. Almarai initially offered 22.25 riyals to Hadco's shareholder in November.

In addition to being a key domestic player in the poultry business, Hadco produces olives, wheat, dates and grass fodder. Almarai has its own cattle farms.

The deal can only be concluded if Almarai gets to own all shares in Hadco, which means every Hadco shareholder must approve the bid at an assembly whose date has not yet been set.

A conclusive end to the bid would give the Saudi bourse its first takeover.

Analysts say the pre-eminence of short-term speculation among retail shareholders is acting as a key impediment to more mergers among listed firms.

Olayan Investment Company holds 6.2 percent of Hadco's capital and Saleh Abdulaziz al-Rajhi and Co holds 6 percent. The remainder is held by retail shareholders whose individual stakes are all below 5 percent.

Almarai has been diversifying its revenues through acquisitions and has earmarked 6 billion riyals ($1.6 billion) for investments to expand outside the Gulf region.
Original source: Reuters
TWITTER
FACEBOOK
TWITTER
FACEBOOK

Post a comment

Name

Email address (optional - if you want a reply)

Comment