Brazilian food producer Perdigão has bought out the minority shareholders of Eleva Alimentos, in another step towards completing a complex takeover process.
Perdigão's public tender offer for the shares held by minority shareholders on São Paulo's Bovespa stock exchange closed on 14 February. The 166 million reais (US$96 million) offer was backed by Credit Suisse.
"This so-called tag-along offer is required by Brazilian law as a result of the acquisition of the control of Eleva by Perdigão," says Eliana Ambrósio Chimenti, partner at Machado, Meyer, Sendacz e Opice Advogados, counsel to Perdigão since the first stages of the merger.
The initial share purchase agreement for Perdigão's acquisition of its rival was made in October (covered by LATINLAWYER here).
"The great challenge of this case was to reconcile the desire of the controlling shareholders of Eleva to receive payment for their shares part in cash and part in Perdigão shares, and to make it viable to grant the minority shareholders the same payment," continues Chimenti.
"The follow-on of Perdigão's shares was structured to deliver payment in cash both to Eleva's controlling and minority shareholders. The shares portion was achieved through a merger of Eleva and Perdigão's shares," she explains.
Poultry and frozen producer Perdigão won a competitive bidding process last year for a stake in Eleva, a rival food company. The merger is expected to make Perdigão the largest food producer by sales in Brazil, and cut distribution and administration costs.
(Latin Lawyer 20.02.2008)