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Categories: Mergers and Acquisitions

Schuitema Open to Mergers After Ahold Sale

Source: Reuters
22/01/2008

Amsterdam, Jan 22 - Dutch supermarkets group Schuitema is open to merger offers once majority owner Ahold sells its stake to CVC Capital Partners, its chief executive said on Tuesday.

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The stake sale would allow Schuitema to expand via mergers and acquisitions, CEO Bert Roetert told Reuters in an interview.

Asked if rival Super de Boer and unlisted supermarket chain Plus would be a candidate, he said: "That would be a logical thought but that is not yet an issue. In any case, I am not excluding anything."

Super de Boer, the second-largest group by sales and formerly named Laurus, recently completed its restructuring and is seen by analysts as open to merger bids under its new chief executive, Jan Brouwer.

"We want to be part of the wave of consolidation in the sector," said Roetert.

On Monday, Ahold said it was in talks with UK private equity firm CVC to sell its majority stake. It said the price would include cash and the transfer of more than 50 stores from Schuitema to Ahold.

"We are excited. We think the deal will succeed," said Roetert.

"(Competition regulator) NMa considers us a whole group and that limits our growth potential. For years now, we have been looking to be free," he said.

Ahold did not provide financial details. Analysts estimate the Ahold stake to be worth 500 million to 600 million euros ($721-$865 million). Schuitema, second-ranked in the Netherlands by market share, has a market value of 760 million euros based on Monday's closing price.

Its shares were 2.9 percent down at 21.10 euros by 1220 GMT, underperforming a 0.2 percent rise in the Dutch small-cap index .

Last week, Schuitema posted a 30 percent drop in 2007 net profit to 35.2 million euros ($50.76 million) despite a 2.9 percent rise in sales to 4 billion euros.

Analysts said its weak performance was due in part to fierce competition and lack of synergies with Ahold as it sought to keep operational autonomy. Ahold owns Albert Heijn, the Netherlands' biggest supermarkets group.

CVC could put Schuitema back on track to a recovery, they said.

"We expect that when CVC gets control over Schuitema, the retailer will become more aggressive in its restructuring efforts and also accelerate the repositioning of the company," SNS Securities analyst Richard Withagen wrote in a note.



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