Fish finger products from the Captain Birds Eye range produced by Iglo. (Photo: Birds Eye/FIS)

Permira calls off Iglo sale

Private equity firm Permira Advisers LLP has called off the sale of Iglo Foods Group Ltd after receiving unacceptable bids. Permira also said it is no longer considering ways to pay itself a dividend from its stake in Iglo.

“We have taken the decision with Permira not to pursue Iglo Group’s partial refinancing,” stated Martin Glenn, CEO of Iglo Group. “For us it is ‘business as usual,’ as we move forward on our strategy for the next phase of our growth.”

Permira explored the possibility of refinancing Iglo’s debt rather than selling its stake after Blackstone Group LP (BX) and BC Partners Ltd submitted an offer of EUR 2.5 billion in June that failed to meet Permira’s minimum target of EUR 2.8 billion to EUR 3 billion. Permira noted that it was not under pressure to sell Iglo immediately and had other alternatives on the table if the bids were not high enough.

BC and Blackstone made a better offer last week, but the figure was still below Permira’s valuation, according to two people with knowledge of the matter. The terms of the debt refinancing were not appealing enough to the sellers, they said, Bloomberg reports.

"Iglo Group is performing strongly and is a well-capitalised business. The momentum in the business is strong and its current capital structure gives it the flexibility to pursue both its organic growth strategy and explore further acquisition opportunities," a statement from the company said.

Just days after rejecting the bid, the firm had lined up a dividend recapitalisation with Credit Suisse and Deutsche Bank. Permira then changed its mind and opted not to pursue the dividend recapitalisation plan after it was unable to reach the level of dividend payout it wanted, loan investors explained, Reuters reports.

Permira wanted to raise around EUR 1.9 billion in a dividend recapitalisation so it could refinance its approximate EUR 1.4 billion worth of debt and take a dividend of around EUR 500 million - EUR 600 million banking sources said. Such a move would have allowed Permira to give some money back to its investors as it looked to attract capital for its fifth buyout fund.

Investors and lenders have become wary in light of concern that Europe’s debt crisis and volatile financial markets are impeding its economic recovery. Private equity firms have contributed USD 20 billion of leveraged buyouts in western Europe so far in 2012, compared to the loftier figures of USD 30.4 billion that were given over the same period last year, according to data compiled by Bloomberg.

Permira purchased Iglo from Unilever NV in 2006 for EUR 1.73 billion, and expanded it after buying the Dutch consumer goods maker’s Findus business in Italy for EUR 805 million four years later. Permira is now seeking EUR 6.5 billion from investors for a new buyout fund.

Related article:

- Permira rejects latest Iglo bid

By Natalia Real
[email protected]
www.seafood.media

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