Valora Shares Climb After Mexico's Femsa Launches $1.2 Billion Takeover Offer

By Ed Frankl

Shares in Valora Holding AG jumped on Tuesday after it said that Latin American retailer Fomento Economico Mexicano SAB has made an up-to $1.2 billion all-cash takeover offer for the Swiss kiosk operator.

The offer by the Monterrey-based company, better known as Femsa, of 260 Swiss francs a share ($270.50) is equivalent to a premium of 52% of Valora's closing share price on Monday, and 57.3% of the volume-weighted average of the past 60 trading days, the Basel-based company said.

Shares at 1126 GMT were up 51% to CHF258.50.

Valora, which operates around 2,700 sales outlets in Switzerland, Germany and other European countries, said its board unanimously recommended that shareholders accept the offer.

The largest individual shareholder of Valora, Ditsch Ernst Peter, who owns a 16.9% stake, supports the offer, the company said.

Valora, whose brands include Backwerk, Ditsch and ServiceStore DB, will continue to operate under its own company name, becoming the retail arm of Femsa's proximity division in Europe, it said.

Femsa, an operator of convenience stores and pharmacies in Latin America as well as a franchise bottler for Coca-Cola Co. products, intends to finance the purchase price entirely with available cash.

The transaction is expected to close at the end of September or beginning of October, after which Valora will be delisted from the stock exchange, it said.

The news was a "big and positive surprise", Stifel analyst Pascal Boll said in a research note.

The price is "the best that shareholders get in the short-run, given that the share price has been consolidating since the onset of the pandemic," he said.

Separately, Valora said Tuesday that first-half sales were up around 20% on year despite the effect of the Omicron coronavirus variant, and that earnings before interest and taxes would be slightly higher on the prior-year period.

Write to Ed Frankl at edward.frankl@dowjones.com

(END) Dow Jones Newswires

July 05, 2022 07:46 ET (11:46 GMT)

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