Here are the details of the bids to acquire Spain’s second-largest poultry producer, submitted by Portuguese group Lusiaves, Murcia-based El Pozo and Ukrainian company MHP. The decision rests with 1,600 shareholders.

A company founded 60 years ago in Tudela (Navarre) by a group of veterinarians is at the centre of an international battle for its control pitting three companies of different nationalities against one another, a contest that could even have geopolitical ramifications.

The 1,600 shareholders of Uvesa — mostly descendants of the founding veterinarians — will have to decide in the coming weeks whether to sell their company, Spain’s second-largest broiler meat producer, to Portuguese group Lusiaves, Murcia-based Fuertes (El Pozo) or Ukrainian company MHP.

The latest bid to arrive has been that of Lusiaves, the Portuguese poultry group controlled by the Gaspar family, which values Uvesa (including its debt) at 340 million euros, according to sources close to the process. This figure exceeds the 312 million proposed by Fuertes and the 290 million offered by MHP.

The debt effect

However, for the time being, the three bids are difficult for shareholders to compare on a like-for-like basis. Lusiaves explains, in a letter sent to shareholders, that it has been unable to determine a final price per share, as the debt and contingent liabilities of Uvesa must be deducted from the value stated in its offer at the closing date of the transaction. If the 90 million euros in liabilities on the balance sheet at end-2023 were subtracted, the price per share would be approximately 190 euros.

A similar situation applies to El Pozo, which has stated it is willing to pay 171 euros per share, but only if it is permitted to conduct a due diligence review of Uvesa’s accounts and contingent liabilities in order to determine the current debt and deduct it from its valuation of 312 million euros.

MHP, which was the first bidder and had time to study the company before submitting its offer, has made a firmer commitment by indicating it can disburse “at least” 150 euros per share. This would imply a payment of 200 million euros, in addition to assuming the 90 million euros of debt. The final offer from this company, led by Ukrainian businessman Yuriy Kosyuk, could be announced within the coming weeks.

Bid conditions

Beyond the differences in valuation methods, the terms of the bids also vary. El Pozo and MHP are seeking to acquire a minimum of 50.01% of the share capital, whereas Lusiaves says it would be satisfied with 35%.

Furthermore, the Portuguese company states that it will not require approval from competition authorities or other government bodies. El Pozo — although its core strength lies in pork and turkey rather than poultry — does appear likely to face anti-monopoly scrutiny, while MHP may need clearance from the Council of Ministers regarding foreign investment in strategic assets (the food sector falls within this category).

Following the Russian invasion of Ukraine, the European Union removed tariffs on poultry from that country, which has enabled MHP to grow strongly. To further complicate matters, Grupo Fuertes holds a stake in Russian meat producer Cherkizovo.

The bid procedures also differ. Lusiaves wishes to bypass Uvesa’s board of directors and has given shareholders three months to accept its proposal. El Pozo and MHP, by contrast, have requested the right to conduct an audit and appear willing to wait for a formal shareholders’ meeting at which the proposals can be compared and a period established for existing shareholders to waive their pre-emption rights.

Given the current content of the bids, Uvesa’s board of directors, chaired by Antonio Sánchez, appears clearly inclined to back MHP’s offer, particularly if it is revised upwards from the 150-euro level, and has begun requesting that shareholders grant it powers of attorney to execute the sale once a firm and final offer is in place.

Management, in notifications to shareholders and at meetings held in Valladolid, Valencia and Tudela, has explained that the proposals from El Pozo and Lusiaves are uncertain as to their final price and do not provide sufficient legal and financial guarantees.

In any event, this is a process with virtually no precedent among unlisted Spanish companies. Although it is similar to public takeover bids (tender offers) for listed firms, in such cases there exists a very rigorous regulatory framework enabling shareholders to compare offers in terms of price, conditions and financing.

The three bids at a glance

MHP: at least 150 euros per share Last January, Ukrainian company MHP (listed in London) fired the opening shot for Uvesa by submitting a binding offer of “at least” 150 euros per share. This values the company’s equity at 200 million euros, with MHP also having to assume approximately 90 million euros of debt. The final price is subject to the conclusions of the audit of the Navarrese company currently being conducted by MHP. Its proposal is conditional on acquiring at least 50.01% of the share capital.

El Pozo: 171 euros per share Grupo Fuertes, the Murcia-based company trading under the El Pozo brand, submitted an offer to Uvesa on 4 February valuing the group at 312 million euros. After deducting the debt, the equity value would stand at 224 million euros, equivalent to 171 euros per share. However, this price is contingent on completing a due diligence review to determine the exact level of debt. Should it prove higher than expected, that figure would decrease; conversely, if debt is lower, the price would increase. Fuertes is seeking more than 50.01% of the share capital.

Lusiaves: 191 euros for more than 35% Portuguese company Lusiaves has attempted to break open the bidding for Uvesa by presenting a highly aggressive offer on 19 February. It values the Navarrese group at 340 million euros, which could translate into a share price of 191 euros. Once again, however, this equity figure is subject to a definitive analysis of the debt position. Lusiaves is not waiting for the conclusion of the bidding process or a decision by Uvesa’s board, and has asked shareholders to accept its offer immediately. It is conditional on acquiring a minimum of only 35% of the share capital.

Source:
-. Roberto Casado, Diario EXPANSIÓN, 26 Feb 2025

Further reading:
-. «More than 3,000 employees of Ukrainian group MHP, which has submitted a bid to acquire Spanish company Uvesa, the country’s second-largest poultry producer, have been called up for military service in the war against Russia.»
-. Other news about MHP on NeXusAvicultura.com
-. News about poultry companies on NeXusAvicultura.com
-. Other news about investment in the poultry sector on NeXusAvicultura.com