Board of Cloetta Fazer rejects Fazer bid
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As was expected, the Board of Swedish candy manufacturer Cloetta Fazer on Wednesday rejected the bid of the Finnish sweets and foodstuffs company Fazer to acquire outstanding Cloetta Fazer shares.
Fazer and its affiliates nevertheless hold 52.7 percent of Cloetta Fazer shares, and 50.6 percent of voting rights. The Finnish side can therefore outgun the Swedes if it so chooses.
The Cloetta Fazer group was created five years ago when the sweets operations of Fazer and Swedish company Cloetta were merged. Cloetta Fazer is the leading sweets company in the Nordic region with a market share of 22 percent.
The public offer of Fazer is valid until April 4th, and the Cloetta Fazer annual general meeting will be held on April 19th.
The Cloetta Fazer Board recommended to its shareholders that they decline Fazer’s bid. The Board felt that the value of the offer is not sufficient. However, the Board did recommend that holders of warrants sell their holdings to Fazer.
Fazer is offering 240 Swedish krona to shareholders, and 30 krona to warrant holders. Ever since the offer was announced in February, the Cloetta Fazer share has traded at a somewhat higher level. At the end of trading on Wednesday, the share was valued at 241 krona.
One of Cloetta Fazer’s largest shareholders, a Swedish foundation, announced a week ago that it would not accept the Fazer offer. The foundation holds over 39 percent of the company’s voting rights.
According to the view of the Cloetta Fazer Board, the candy giant has a strong market position in Finland and in Sweden, well-known brands, and an efficient organisation. Also, the company’s strong financial standing would allow for acquisitions.
The Cloetta Fazer Board was aided in its decision-making by a review of the situation prepared by Carnegie Investment Bank.
Helsingin Sanomat
