April 3, 2014 / 12:05 PM / 3 years ago

Offers for Spain's Deoleo fall short of market price

MADRID (Reuters) - Spanish olive oil producer Deoleo (OLEO.MC) said on Thursday that all offers received for the company had been below Wednesday's closing share price, which valued the company at 486 million euros ($669 million).

A 31 percent stake in the maker of well-known Spanish cooking oil brands such as Carbonell has been put on the block by several Spanish banks including nationalized Bankia (BKIA.MC) as they seek to shore up capital by selling non-core assets.

The sale is becoming highly-politicized as Italian state-backed fund Fondo Strategico Italinao (FSI) woos the company, with Spanish Agriculture Minister Arias Canete saying on Wednesday that Spain did not want the company to be split up.

Under Spanish stock market rules, any party that buys more than 30 percent of the group will have to launch an offer for the entire company. Deoleo said on Thursday that all offers received had been for the whole company and it would examine each of them.

Spain is the world's biggest olive oil producer, but it lags behind Italy in exports, partly because tons of Spanish olive oil are sold in bulk to Italy for bottling and re-selling outside the European Union. Deoleo is among the bottlers.

Possible Bidders

The United State's Carlyle this week expressed its interest in the company, while CVC and France's PAI have also been circling, sources familiar with the process said.

However, some companies that had looked at the Deoleo stake have backed away because of the political backdrop, bankers said.

Spain is just emerging from a prolonged recession, helped by rebounding exports, and the government has held up the olive oil sector as a key growth driver.

"It's a strategic sector for Spain," Enrique Delgado, secretary general of Infaoliva, an olive oil producers' federation in Spain, told Reuters.

"If another international group moves in, they might be inclined to break up the company. The Italians might want to take back their brands or sell Carbonell, for example."

In spite of Canete's insistence that the government does not want Deoleo broken up, he added that the state would not veto any bids.

"The government is following this whole process very closely ... it is maintaining contact with all those implicated and with the company's management," he said.

Spanish oil cooperative Dcoop, which is already a Deoleo shareholder with a 10 percent stake, was also interested in the deal, Canete added. ($1 = 0.7263 Euros)

Writing By Sonya Dowsett and Sarah White; Editing by David Goodman

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