Bachoco committee: Shareholder buyout offer ‚Äėreasonable‚Äô

An ad hoc committee formed by Industrias Bachoco considers a recent buyout offer from select company shareholders ‚Äúreasonable,‚ÄĚ the company announced in a securities filing.

Roy Graber Headshot
(Bachoco)
(Bachoco)

An ad hoc committee formed by Industrias Bachoco considers a recent buyout offer from select shareholders ‚Äúreasonable,‚ÄĚ the Mexico-based company announced in a securities filing.

In March, shareholders of the family of Robinson Bours, the founder of Bachoco, informed Bachoco‚Äôs board that it intended to launch a voluntary public offering for up to all of the outstanding shares of the company, which amounts to about 27% of Bachoco‚Äôs outstanding capital.

The ad hoc committee, exclusively consisting of independent members of Bachoco’s board of directors, was formed in April to consider an offer that was announced on March 25. That offer was made by certain unidentified shareholders to purchase all of Bachoco’s outstanding publicly owned shares not owned by such shareholders. The offer was to make the purchase at MXN81.66 (US$4.08) per share, a price that offers a premium of about 20%.

The committee consulted with FTI Capital Advisors (FTICA) as an independent expert to render its opinion to the board regarding whether it thought the offer was financially fair to the holders of Bachoco shares.

In June, FTICA held a meeting with Bachoco’s ad hoc committee, and another one took place September 19.

During the most recent meeting, representatives from FTICA again met with the committee and presented them with a written opinion that the offer price was indeed fair.

After the committee received that opinion, it determined the offer was ‚Äúreasonable from a financial point of view,‚ÄĚ and stated it will inform the full board of directors of that opinion.

But the securities filing also stated that it understands that for each shareholder: ‚ÄúHow many shares to tender is a personal investment decision based upon such individual shareholder‚Äôs particular circumstances. Accordingly, each shareholder is urged to make its own decision as to whether to tender its shares in the potential offer and, if so, how many shares to tender, based on all available information, including the shareholder‚Äôs investment objectives, the recent market prices of the relevant shares, the shareholder‚Äôs own views as to Bachoco‚Äôs prospects and outlook and any other factors that the shareholder deems relevant to its investment decision.‚ÄĚ

Bachoco, according to the Poultry International Top Companies survey, is Mexico’s largest broiler producer and the ninth largest in the world. As an egg producer, Bachoco ranks as the second largest in Mexico and the 13th largest in the world. Its U.S. subsidiary, OK Foods, is the 17th largest broiler company in the United States.

Earlier this year, Bachoco closed on its acquisition of RYC Alimentos, a meat processor and distributor mainly of beef, pork, and chicken with national coverage that participates in all the distribution channels with fresh and value-added products. It also acquired Mexican pork company Sonora Agropecuarira in 2020. 

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