* Sigma says has commitments from 44.5 pct of Campofrio shareholders
* Launches full bid worth 695 million euros
* Acceptance from major shareholder Shuanghui key
* Campofrio shares jump 11 percent to 6.83 euros
By Tracy Rucinski
MADRID, Nov 14 Mexican frozen food company Sigma Alimentos has launched a 695 million euro ($932 million) takeover bid for Spanish meat processor Campofrio at a price analysts said could tempt its leading shareholder to sell.
Sigma said on Thursday it had secured commitments from shareholders with 44.5 percent of Campofrio - a household name in Spain - meaning that it now needs to persuade China's Shuanghui International Holdings to part with its 37 percent stake in the firm.
Analysts said that Sigma's offer of 6.8 euros per share - a 10.6 percent premium to Wednesday's close - was only in line with the sector average, an EV/EBITDA ratio of about 6.0, but could be enough to win acceptance from Shuanghui.
Shuangui inherited its Campofrio stake when it bought U.S. pork producer Smithfield Foods for $4.7 billion earlier this year. It said in September it planned to reduce the holding to less than 30 percent by December - a move interpreted as bypassing a Spanish legal requirement to launch a bid and gaining time to consider its options.
Bankers said it seemed unlikely the Chinese group would want to hold on to Campofrio given that its products - which include hot dogs and canned ham - have little appeal for Chinese consumers.
Other industry sources have suggested Shuanghui is more likely to be focused near term on integrating Smithfield rather than taking over Campofrio.
Sigma's offer represents a 24 percent premium to the 5.5 euros per share at which Campofrio was trading when Shuanghui announced its intention to reduce its stake.
A Hong Kong-based spokeswoman for Shuanghui International declined to comment on the matter.
Even if Shuanghui rejects the offer, Sigma may be able to woo minority shareholders to accept the bid and give it a majority stake above 50 percent, analysts said.
Campofrio shares jumped 11 percent to 6.83 euros, just above the bid price.
CROSSING THE ATLANTIC
Sigma's bid for Campofrio would allow the firm to expand its footprint from Mexico, where it sells well-known brands such as Fud and Nochebuena, the United States, Central and South America into Europe, where Campofrio is a major player.
After a drawn-out economic crisis during which foreign investors shunned Spanish assets, a number of overseas buyers are starting to close deals in Spain, drawn by bargains and the country's exit from five years of stop-and-go recession.
Sigma, part of Mexican conglomerate Alfa's, said its takeover bid follows an agreement to buy 44.5 percent of Campofrio from shareholders Oaktree Capital, lender La Caixa and Chairman Pedro Ballve for an undisclosed price.
Oaktree, with 24.25 percent of Campofrio, was considered a potential seller at the right price, while bank La Caixa, with 4.17 percent, needs to sell assets to shore up finances.
Meanwhile, Sigma has offered to keep Ballve, who is selling his own 12.4 percent stake in the company and publicly backing the takeover bid, as Campofrio chief as well as chairman of the wider Sigma group for the next five years.
As part of the agreement, Ballve will also receive financing from the Mexican group to buy back his stake once the takeover is complete.
Campofrio posted underlying core profit of 100 million euros in the nine months to Sept 30, down 3.7 percent from a year earlier due to higher raw material costs.