Dcoop envisages the sale of Deoleo.

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26 Aug. 2014

Although Dcoop offered equal terms, Bankia and BMN (supported by CaixaBank and Unicaja) preferred to sell their stake to a foreign investor.

Dcoop regrets that the financial institutions, shareholders of Deoleo preferred a foreign investment to a project based in the Spanish industry.

The Board of Directors of Deoleo SA agreed today to sell the shareholding of Bankia and BMN to the private equity firm CVC Capital Partners. With regard to this, Dcoop S.Coop.And. states the following:

We regret that the Spanish financial institutions that are shareholders and members of the Board of Directors (Bankia, BMN, CaixaBank and Unicaja) have agreed the sale of a shareholding to CVC which now acquires control over the company, when there were clear alternatives in this process that allowed the future viability of a company supported with Spanish capital. All this despite our buying intentions expressed in the media. Moreover, the operation has been done too quickly, something we consider unnecessary, and disregarding the new possibilities opened, just a few days after the submission of binding offers, so we must ask ourselves who did really benefit from this operation.

Recently, Dcoop proposed to lead a project based on the Spanish production sector, clearly focused on industry and experience on Spanish markets. To do this they were willing to increase their share, for which the necessary funding was available. Large questions have now arisen about how will this operation affect to the global leadership of the Spanish oil sector. We should consider that the acceptation of CVC’s buyout offer (OPA – Public Offer for Acquisition of Shares), will result in greater control of Deoleo by a financial company, unfamiliar with the olive markets and whose interests do not necessarily coincide with those of the sector, and who might prioritize the short-term profitability at any costs, over a viable plan for the future which searches for added value.

At the last moment, Dcoop even offered to buy the shares of Bankia in equal terms that the private equity firm, something that was eventually rejected by the Board of Directors of  Deoleo of which the referred financial institutions are members. Dcoop was even willing to acquire other shareholdings, however, both BMN and Bankia chose this foreign venture capital firm.

Most olive growers are wondering today how can be possible that banks that were bailed out with public funds (Bankia and BMN) have now approved this transaction which creates great uncertainty for their future sustainability in many producing areas. Bankia is nowadays a public entity and BMN, after merging with CajaGranada, operates in the same producing areas as Deoleo.

The recent statements of politicians don’t match with their facts, as the Authorities have not made the necessary actions to stop the operation. What is clear is that the Government of the Nation, as owner of Bankia, preferred to sell its stake to a foreign investor rather than to carry out a national joint project reasonable and viable.

CVC become Deoleo’s largest shareholder, a dominant position that may be enlarged through the buyout offer (OPA). It remains to be seen what the position is of  the two other entities with a strong presence in Andalusia: the Basque Kutxabank and the Catalan La Caixa; the latter did not object to this transaction.

Dcoop stated that they find meaningless to continue in Deoleo if this process results  in a situation where management doesn’t focus on the national olive oil sector, as Dcoop aims to become leader with its contribution as a company aware of the activity industry and market, with the support to the producers and the enhancement of the image of the Spanish oil in the world. These concerns were brought to all actors involved in this process, in vain. Therefore Dcoop internally will study the new situation to make a decision as to whether they should continue in Deoleo. Clearly as a shareholder they will not follow a management that might be contrary to the interests of the producing sector and with colleagues that cannot be trusted, despite the good intentions expressed. The new Deoleo and its operators won’t support the olive as a strategic sector for Spain, of which many families live. Deoleo will remain governed by financial companies that will not place among their priorities this social culture. This is a new missed opportunity for a strategic agri-food industry in Spain, from which we hopefully experience the least possible adverse consequences.

In any case, Dcoop will continue all projects undertaken and others that might come to get the highest return for its partners and will work for concentrate supply, only way for producers to defend their productions.

 

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