(Adds details, analyst comments)
By Agnieszka Flak and Elisa Anzolin
MILAN, Sept 30 Autogrill's food and beverages
unit is expected to start trading around 5.3 euros per share
from Oct. 1 after splitting off its duty free unit, which in
turn is seen making its debut near 7.0 euros, a Reuters survey
of six analysts showed on Monday.
Italy's Autogrill is spinning off its smaller but
growing travel retail and duty-free unit from its food business,
hoping the move will allow it to sound out market opportunities
and pave the way for possible tie-ups at either company.
World Duty Free Group (WDFG) will be listed on the
Milan stock exchange on Oct. 1, with its head office in Madrid.
The forecasts for the food and beverages unit, which will
continue to operate under the name Autogrill, ranged from
4.4-6.0 euros, while the estimates for the WDFG price ranged
from 6.5-8.2 euros.
Autogrill shares, which have gained 30 percent since the
split was approved in May, were at 13 euros by 1422 GMT.
Following the split, each Autogrill shareholder will receive
the same number of WDFG shares as those held in Autogrill.
Initially, both stocks will be included in the FTSE MIB
blue-chip index, but one may be removed within days if
it does not meet the requirements of the index, the bourse said.
"The travel retail business offers more upside potential,
given the possibilities for M&A in the sector in the short to
medium term," an analyst said, but asked not to be named.
"On the food business, investors are waiting for the outcome
of the planned restructuring to see how Autogrill positions
itself in the weak market in Italy," another analyst added.
Autogrill's catering business has been badly hit by reduced
motorway traffic during the recession in Italy.
Sixty percent of the unit's concessions in Italy will expire
within the next three years, analysts said, giving the group an
opportunity to reassess its presence in a market where the
prolonged recession is still hitting traveller's expenditure.
Following the spin-off, the unit is expected to restructure
and recover margins in its European business, and pursue new
growth opportunities - organically and via acquisitions - in
emerging and developed markets, analysts said.
Britain's SSP, which operates food and beverage brands at
airports and in railway stations in 30 countries, could be a
possible good fit for a tie-up with the unit, offering more
exposure to northern Europe, analysts said.
WDFG is expected to report robust and profitable organic
growth in the coming months, with analysts seeing various
opportunities for the group to expand its already strong
foothold in Europe and to grow in North America and a number of
emerging markets, especially in Asia.
The group is now the second-largest operator globally in a
still fragmented sector and is expected to become a driving
force in future consolidation, they added.
"WDFG will definitely take on the role of a consolidator,"
another analyst added. "We also expect WDFG to participate in a
number of new concessions currently on the table."
Among possible M&A targets for WDFG, analysts mentioned
Switzerland-based Nuance and Paris-based Lagardere Services,
citing various synergies between either company and WDFG.
(Reporting by Agnieszka Flak and Elisa Anzolin)