US pet and food products company Del Monte Foods has accepted a $5.3bn takeover bid from a KKR-led private equity consortium after 45 day go shop period failed to produce any alternative offers.
The consortium, which also features Vestar Capital Partners and Centerview Partners, he firms are to pay $19 per share for the company, valuing it at $4bn, with the assumption of $1.3bn of debt bringing the value of the deal to $5.3bn. The share price represents a 40 per cent premium on the company’s average closing share price during the past three months to 18 November, and is the highest price reached during the company’s publicly-traded life.
“The company noted that it did not receive any alternative acquisition proposals during the “go-shop” period,” Del Monte management said in a statement.
Del Monte used to be a subsidiary of food and tobacco conglomerate RJR Nabisco, which was the target of a $25bn takeover battle in 1989 between KKR and the company’s management team, alongside investment bank Shearson Lehman Hutton. At the time, it was the largest leveraged buy-out in history.
Shortly after the takeover, KKR sold Del Monte to an investor group led by Merrill Lynch.
Del Monte Foods, which includes the Contadina canned vegetables and Milk-Bone dog biscuits brands, posted sales of $3.7bn in its last fiscal year to April. The company is no longer linked to fresh fruit and vegetables business Fresh Del Monte.
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