Bloomberg, quoting two anonymous “people with knowledge of the matter”, said Saudi Arabia-based Savola was working with Singapore’s state-owned investment company to make the joint bid, which could be worth US$4bn-5bn, as of early this month. Talks between the three companies were reported to be ongoing, with a deal possible by the end of the year.
On news of the rumoured deal, both Savola and Americana’s stock prices rose.
Web of denials
But a week ago Americana, more properly known as Kuwait Foods Company, appeared to quash the rumours, denying it had received any binding offers. However, it has been the firm’s standard procedure to deny any and all aspects of its potential sale, including, at first, the fact it was being offered for purchase in the first place.
Savola has long been reported as one of Americana’s potential suitors, but had not been named among the front-runners, listed behind Bloomberg favourites KKR and CVC Capital Partners. However in March, CVC pulled out of the bid, leaving KKR as a solo player.
Temasek is a new entrant to the bidding process, but Bloomberg noted it has recently been active in acquiring consumer-facing businesses as part of an effort to diversify its portfolio. The Singaporean firm has also said it will be focusing on agricultural investments, among other sectors.
Since rumours first emerged of a potential sale of Americana by its owners, the Al Kharafi family, in April last year, the firm’s sale has been dogged by rumour and speculation, but little actual movement. In January the sale was reported to be close to collapse, with bidders unable to come to terms with Americana’s shareholders – news which the firm predictably denied.
‘Dead chicken’ opportunity
Brazil’s BRF managed to get drawn into the denials when it was rumoured to be making a bid for the firm, a report it issued a formal statement to refute. BRF had previously been in talks with Americana to form a joint venture, but these had fallen through – and the firm’s CEO told the Washington Post it would only return to the talks if Americana became a “reasonably dead chicken” (meaning an easy target).
Americana is one of the GCC’s largest food producers, active not only in retail, with its range of consumer food products, including its own-brand frozen meat, but also in food service, where it owns regional franchises of brands including Pizza Hut, KFC and TGI Fridays. According to Thomson Reuters, the firm is worth around US$3.1bn.