Paris-based private equity firm PAI Partners has agreed to acquire a controlling stake in Italian coffee-machine maker Saeco International Group SpA for €508 million (U.S. $618 million).
PAI will purchase a 66.85-percent stake from core shareholders, including chairman Sergio Zappella and other top managers, for €3.80 per share. As Italian law requires, it will then make a public tender offer for the remaining 33.15 percent. If all of the minority shares are tendered, that will bring PAI's total price to €746 million.
The minority shareholders will be offered only €3.59 per share, less than the €3.67 per share closing price Dec. 5. But PAI said that nonetheless constitutes a premium of 2.7 percent, 4.6 percent and 6.3 percent, respectively, to the average weighted price of Saeco shares during the last 3, 6, and 12 months.
The breakdown of debt and equity was not provided. The deal will be partially funded by loans provided by J.P. Morgan and is expected to close at the beginning of 2004. Saeco's core shareholders will reinvest a portion of their funds in the new entity that will acquire Saeco. Zappella will remain as chairman, and other top managers will also be retained.
PAI, formerly the buyout unit of BNP Paribas SA, said the acquisition fits with its strategy of acquiring leading European consumer brands. Previous investments have included British cookie maker United Biscuits, French dairy product group Yoplait and the French pasta maker Panzani Lustucru. PAI has also invested diverse businesses such as Elis, an industrial linens company, the pharmaceutical company Ipsen and Antargaz, France's leading LNG distributor.
One analyst said that PAI could potentially raise its offer to minority shareholders to €3.80 per share but added that it doesn't need to because it will already have the two-thirds majority needed to approve extraordinary measures such as mergers and acquisitions.
to Daily News