Shares in Dutch baby food and vitamins group Numico rose sharply last week following rumours of a possible bid from French dairy, biscuits and bottled water group Danone.
Numico has been struggling recently, and its shares had plunged as a result of the dismissal of its US chief and its chief financial officer. But the rumours of a bid from Danone, reported in Dutch newspaper NRC Handelsblad, helped the shares rally late on Friday.
Neither Numico nor Danone have commented on the rumours, but a bid from the French group would be an odd choice at a time when the dairy giant has been steadily divesting all its non core businesses to focus on its core Danone dairy, LU biscuit and Evian/Volvic water brands.
While the baby food and clinical nutrition businesses owned by Numico could potentially be of interest to Danone - many dairy groups are active in the baby food sector, such as Campina or Nestlé - the vitamin arm of Numico is less likely to fit with Danone's existing business.
But with Numico in such a weak financial situation at the moment, any bid from Danone seems unlikely, even it could find a buyer for the vitamin unit. Numico has been hit by the weak market for dietary supplements in the US, and in November it said full-year 2002 earnings before interest, tax and amortisation (EBITA) would be between €420-440 million, down from €667 million in 2001.