Takeover bid by Bell Food Group for Hügli
"Bell Food Group acquires majority stake in Hügli Holding AG and announces takeover offer for the remaining publicly held shares
In future, Bell Food Group will generate more than a quarter of its total sales in the high-margin convenience segment and will become a leading European provider in this area
Takeover price of CHF 915 per share corresponds to a premium of 14.4%
Capital increase with proceeds of around CHF 600 million planned to finance the takeover and further growth in the convenience segment
Bonds of around CHF 350 million issued for refinancing purposes
Change in the Board of Directors of Bell Food Group: former Chairman of the Board of Directors of the Hügli Group, Jean Gérard Villot, proposed as an additional member and Philipp Wyss, Deputy Chairman of the Coop Executive Board, proposed as successor to Jörg Ackermann, who is stepping down Basel, 15 January 2018. January 2018 - The Swiss Bell Food Group, one of the leading meat processors and producers of convenience products in Europe, has acquired Dr. A. Stoffel Holding AG, the majority shareholder of the internationally active Hügli food group. Stoffel Holding holds an equity stake of 50.2% and 65.0% of the voting rights in Hügli Holding AG, which is based in Steinach (SG). At the same time, the Bell Food Group is making a public takeover offer for the remaining publicly held shares of Hügli Holding AG at a price of CHF 915 per share and thus at the same price in relation to the nominal value as for the majority stake held by Stoffel Holding. This price corresponds to a takeover premium of 14.4% to the volume-weighted average price of the last 60 trading days prior to the announcement of the takeover offer. The Board of Directors of Hügli Holding AG unanimously supports the offer and recommends it to the shareholders for acceptance.
The acquisition will be financed through a combination of equity and debt capital. To ensure a balanced capital structure in the medium to long term, the Bell Food Group will propose a capital increase with proceeds of around CHF 600 million to its shareholders at the Annual General Meeting on April 10, 2018. This will be used to finance the acquisition of Hügli, the previously announced strategic investment program for the production sites in Switzerland and further growth in the Convenience segment. It is expected that the placement of the new shares will be guaranteed when the final terms are announced. The Coop Group Cooperative in Basel, which holds a 66.3% stake in the Bell Food Group, has already agreed to exercise its subscription rights in full and to acquire the corresponding number of new shares in Bell Food Group Ltd.
The Bell Food Group was the new desired owner for the founding family of the Hügli Group, which has existed since 1935. The recently deceased grandson of the company founder, Alexander Stoffel, was personally involved in the initial talks with the Bell Food Group. The Hügli Group, which is active in the development, production and marketing of soups, sauces and meat alternatives, generated sales of CHF 385 million in 2016. The company employs around 1,500 people and operates 10 production plants in Switzerland, Germany, Italy, Spain, the Netherlands, the Czech Republic and the UK. The transaction is still subject to the approval of the European competition authorities. As the product portfolios of Bell Food Group and Hügli and their most important customer groups complement each other and there is virtually no overlap, no conditions are expected to be imposed by the authorities.
Following the recent complete takeover of the fresh convenience specialist Hilcona and the salad supplier Eisberg, the Bell Food Group is thus consistently pursuing its strategy of further growth in the attractive convenience segment in terms of sales and earnings. Hügli's product range, which focuses primarily on long-life convenience products, is an ideal complement to its existing range of fresh convenience products. The sales channels geared towards the retail and food service sectors are also largely complementary. Especially in the important food service market, the Bell Food Group is strengthening its existing position thanks to Hügli's direct distribution and experienced sales team. Bell Food Group is also expanding its international presence in the important European markets. Further potential will arise from synergies in procurement, the expansion of customer portfolios and the exchange of know-how in development and other areas of technology.
By joining forces with the Bell Food Group, which intends to continue Hügli as an independent company, the continuation of Hügli's successful business model is assured. The two companies share a similar history, culture and quality philosophy. They also pursue a comparable international growth strategy. To ensure continuity, the Bell Food Group intends to propose the current Chairman of the Board of Directors of the Hügli Group, Jean Gérard Villot, as an additional member of the Board of Directors of Bell Food Group Ltd at the Annual General Meeting on April 10, 2018.
"Together with the strengthening of our traditional business areas, the acquisition of Hügli is an important milestone in our growth strategy in the convenience sector," said Hansueli Loosli, Chairman of the Board of Directors of the Bell Food Group, commenting on the acquisition. "We are proud that the founding family of Hügli has chosen us as its new owner. We are convinced of the great potential of this alliance for the benefit of our customers, employees and shareholders."
In addition to the announced capital increase, the Bell Food Group plans to issue new bonds in the amount of around CHF 350 million in the second half of January. These will primarily serve to refinance the second tranche for the acquisition of the minority stake in Hilcona, the early refinancing of the CHF 175 million bond maturing in May 2018 and general financing purposes. UBS Investment Bank was mandated as sole advisor in connection with the overall financing.For the 2017 financial year, Bell Food Group expects EBITDA to be at the previous year's level and net profit to be up on the previous year. The Board of Directors will also propose an increase in the dividend by CHF 1 to CHF 8 per share at the Annual General Meeting. Bell Food Group will announce the detailed business results on February 13, 2018.
Change in the Board of Directors of Bell Food Group Ltd
The Board of Directors of Bell Food Group Ltd has nominated Philipp Wyss as a new member of the Board of Directors. He will be proposed for election at the 2018 Annual General Meeting to replace Jörg Ackermann. Jörg Ackermann has been a member of the Board of Directors since 2000 and served as Chairman from 2001 to 2009. Jörg Ackermann is stepping down from the Board of Directors at his own request.
Philipp Wyss (50) is Deputy Chairman of the Coop Executive Board and has been Head of Marketing/Procurement at Coop since 2012. He joined Coop in 1997 as Category Manager Meat, Fish and Fresh Convenience. In various roles at Coop, Philipp Wyss has gained extensive experience in the category management of fresh products and in retail sales. Among other things, he was Head of the Retail Directorate from 2009 to 2011, with overall responsibility for Coop's sales activities. Before joining Coop, he held various management positions in the food sector.
About Bell Food Group
The Bell Food Group is one of the leading meat and convenience processors in Europe. Its product range includes meat, poultry, charcuterie, seafood, convenience products and sliced salads. With the Bell, Hilcona and Eisberg brands, the Group covers a wide range of customer needs. Its customers include the retail and food service sectors as well as the food industry. Around 10,000 employees generate annual sales of CHF 3.4 billion. The Bell Food Group is listed on the Swiss stock exchange.
About HügliHügli was founded in Switzerland in 1935 and is today one of the leading European food companies in the field of dry blended products in the convenience segment. These include soups, sauces, bouillons, desserts, functional foods and delicatessen specialties. Hügli supplies the kitchens of professional out-of-home caterers (Food Service), manufactures products for branded companies and food retailers (Customer Solutions), is a business partner of food producers (Food Ingredients) with flavoring semi-finished products and distributes its own brands, mainly in organic quality, to consumers (Consumer Brands). Over 1,500 employees in 11 countries generate annual sales of around CHF 385 million (EUR 340 million).