United Malt Group Ltd (UMG.AX) granted exclusive due diligence access to Malteries Soufflet, a branch of French agribusiness InVivo, after receiving a A$1.50 billion ($998 million) offer, the Australian commercial maltster said on Tuesday, sending its shares up 35%.
The takeover of 100% of United Malt would make InVivo the world's top malt producer and double the size of its malt business three years earlier than planned, InVivo Chief Executive Thierry Blandinieres told Reuters.
Earlier this year, it signed an agreement to take over Belgian malthouse Castle Malting, one of the oldest producers of the beer ingredient in the world, also specialized in the craft market.
"We would already have a share of 20% share of the malt market with a great growth potential ahead of us," he said in an interview.
A deal would lead to a potential combined annual production capacity of 3.7 million tons of malt, InVivo said.
InVivo is also looking at external growth in malt in eastern Europe, India and Asia, Blandinieres said.
The A$5 per-share non-binding offer represents a 45.3% premium to the United Malt stock's last close of A$3.44.
Shares in United Malt Trading was halted on Monday. They soared to A$4.64 in their biggest intraday percentage jump when they returned to trading. By 0853 GMT they stood at $4.50 per share.
United Malt disclosed it first received an offer of A$4.15 per share in December followed by several others from the French firm. The latest indicative proposal was made on March 14.
United Malt is the world's fourth largest commercial maltster, producing bulk malt for brewers, craft brewers, distillers and food companies. The company has processing plants in Canada, the United States, Australia and the United Kingdom.
United Malt's main shareholders are Australia's GrainCorp (GNC.AX) and investment firm Tanarra Capital.
InVivo acquired Malteries Soufflet as part of its takeover of agribusiness peer Soufflet in 2021, with the help of investors including KKR (KKR.N) and Credit Agricole (CAGR.PA). These would keep a similar share after InVivo's planned capital rise, Blandinieres said.
Blandinieres said he was confident that Malteries Soufflet's offer would be approved by the board. It would lead to a delisting of United Malt.
InVivo is a combination of nearly 200 farmer cooperatives that Blandinieres would like in future to rival global crop merchants such as Archer Daniels Midland Co (ADM.N) and Cargill.
($1 = 1.5038 Australian dollars)
Reuters