Bel will delist to have more freedom

On the 03/22/21 at 7:48AM


Bruno de Roulhac

The French cheesemaker divests Leerdammer to Lactalis in exchange for 23.2% of Bel shares. Bel will buy out the 4.5% of the shares left in its free float, followed by a squeeze-out offer.

Bel, the French cheesemaker, continues to move towards its goal of becoming a “healthy snacking” major. This transformation will now take the form of a divestment of cheese assets and a delisting from the Paris market. Bel listed in 1946, but its small free float (3.59%) and lack of real liquidity no longer justifies a listing, even for a €2.6bn market cap. This is the latest delisting from Euronext Paris.

First, Bel began negotiated exclusively with Lactalis to sell it its flagship Leerdammer brand, along with its businesses in the Netherlands, Italy, Germany and Ukraine. This will be paid for with the 23.16% of Bel shares owned by Lactalis, worth €602m as of 17 March. Leerdammer and Bel Shostka Ukraine generated about €350m in revenues in 2020 and an operating profit of €25m. In the almost 20 years it has owned it, Bel has doubled Leerdammer’s revenues and margins This divestment, on which Bel was advised by BNP Paribas and Perella Weinberg Partners, is due to close by the end of summer. Post-deal, Lactalis will hold just 0.90% of Bel’s shares. The dairy group controlled by the Besnier family had held this stake for several years. A shareholding, paired until 2015 with a stake at the heart of the Unibel holding, had created tensions between the two family-owned dairy leaders.

Buy-out and squeeze-out at €440 per share

In a second stage, in early autumn, Bel will file a public buy-out bid (“OPRA”) at €440 per share, dividend attached. However, Bel has no plans to pay out a dividend on 2020 earnings. The price includes premiums of 18% to the latest share price and 28% to the average weighted price over the past two months. The buy-out will be conducted by BNP Paribas. The deal includes the 4.49% of shares still traded publicly (3.59% of the free float and 0.9% of Lactalis). Hence, a total cost of €136m.

In a third stage, Unibel, the Fiévet-Bel family’s holding company, plans to file a public buy-out offer, followed by a mandatory squeeze-out (“OPR-RO”) of shares remaining in free float after the buy-out bid, at the same €440 per share price. Finexsi, a consultancy, has been appointed independent appraiser by Bel’s board of directors. Its assignment will be followed by an ad hoc committee consisting mostly of independent directors.

Expansion in Asia and North America

The divestment of Leerdammer is part of Bel’s shift towards dairy, and fruit- and plant-based products announced back in 2015, and continued in 2016 with the acquisition of MOM – which owns Materne, Pom’Potes and Mont Blanc, among other brands – and in 2020, with the purchase of All In Foods, a French start-up offering plant-based alternatives to cheese and plant-based sauces. In the medium term, Bel plans to generate half of its revenues in dairy and the other half in fruit- and plant-based products.

The divestment of Leerdammer, which, like any brand, requires heavy investment, will give Bel additional leeway. Moreover, Lactalis’s sale of its shares will give Bel’s family shareholders greater flexibility in financing its growth. Bel plans in particular to accelerate its expansion in the Asia-Pacific region and North America, which, it says, are “very high potential” markets. The Americas and Asia-Pacific accounted for 27% of the group’s sales last year, but achieved the strongest growth (+7.5%, including +9.5% in organic). As of the end of 2020, the group had €590m in cash and €820m in credit lines.

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