Perrier-Nestle

Topics: Stock market, Stock, Share price Pages: 25 (3729 words) Published: April 21, 2014
PERRIER, NESTLÉ, AND THE AGNELLIS
Gulleroglu|Mbewe|Shkreta|Secilmis
24 April 2013

Summary
 Perrier S.A, the world’s largest mineral water company is facing financial and reputational difficulties due to a recent scandal where benzene was found in its products
 The prominent Italian family The Agnelli’s, who own Fiat SpA, see the opportunity to take over Perrier  They are bidding indirectly through two French companies, Exor who has 35.5% of controlling votes in Perrier and Saint Louis who owns 13.8% of the Perrier stock in the form of Treasury stock

 The Swiss-based food giant Nestle and its French ally BSN (future DANONE) contest the bid and are interested in acquiring Perrier as well  Nestlé's advancement for Perrier was simultaneous/coordinated with BSN bid for Exor  Nestlé's chances, at first sight, seem limited. The Agnelli’s nearly control 50% of Perrier  Furthermore Nestle filed two lawsuits in France

 1- It asks the authorities to look at Exor’s control stake because they have breached the law  2- It asks for the nullification of the share sales to Saint Louis  The European competition authorities will have a close look at the merger because Nestle/Perrier would control 56% of the mineral water market.

 Combined with BSN the market control shoots-up at 82%

Blueprint of events
 1989 - Exor increase control stake in Perrier to 35.5%. Prior to the increase it owned 23.7%  19/01/1990 – Benzene scandal
 Share price drops to FF 1200 from FF 2000
 Profits from Perrier mineral water business decrease by 21%  06/1990 – Jacques Vincent, Chairman of Perrier, replaces Gustave Leven as Perrier Chairman  11/1991 – IFINT launches a friendly bid of FF 1320 for 2/3 of Exor with the backing of the Mentzelopoulos family  03/01/1992 - Saint Louis acquires 13.8% of Perrier

 13/01/1992 – Nestle announces that it is interested to bid for Perrier  20/01/1992 – Nestle and Banque Indosuez make a full bid for Perrier at FF 1475  21/01/1992 – Perrier refuses Nestlé's and Banque Indosuez bid  21/01/1992 – Nestle starts two court proceedings

 One against the right to vote of Exor
 The other against the sale of treasury stock to Saint Louis  21/02/1992 – BSN makes a hostile bid for Exor at FF 1420 per share  26/02/1992 – Exor rejects BSN offer
 26/02/1992 – Exor forced by French courts to launch a full bid for Perrier or a 2/3 bid at 2% premium over Nestlé's offer  27/02/1992 – Exor makes an unconditional offer for 100% of Perrier at FF 1475

Ownership structure
100%

100%

AGNELLI FAMILY

LAZARD FRERES

IFINT

IFIL

BANQUE
INDOSUEZ

6.5%

MENTZELOPOULO
S FAMILY

36%

5.8%

SAINT LOUIS

CREDIT AGRICOLE

6.8%
BSN

PUBLIC

WORMS et CIE
35%

5%

15%

10%

35%

EXOR

LEVEN FAMILY
PUBLIC

SOCIETE
GENERALE

51%

49%

OMNICO
6.7%

28.8%

8.5%

13.8%

PERRIER

18%

24%

Agnelli Family indirect shareholding in Perrier
IFINT

100%

100%
AGNELLI FAMILY

IFIL

7.4%

35%

WORMS et CIE

EXOR

6.5%

49%
OMNICO

Control

SAINT LOUIS

6.7%

28.8%
PERRIER

13.8%

Agnelli’s control and capital in Perrier
 IFINT = 11.23% control rights over Perrier
 Exor: 35%*28.8% = 10.08%
 OMNIC: 35%*49%*6.7% = 1.15%

Control
Rights

 IFIL = 1.49% control rights over Perrier
 Saint Louis: 6.5%*13.8% = 0.9%
 Worms et Cie: 7.4%*57.5%*13.8% = 0.59% (based on the assumption that control rights in Saint Louis equal 57.5%)
Therefore the Agnellis control 12.72% in Perrier

 Total Capital in Perrier as of 1991: FF 449,153,000
 Exor: 10.08%* FF 449,153,000 = FF 45,274,622.40
 OMNIC: 1.15%* FF 449,153,000 = FF 5,165,259.50

Capital

 Saint Louis: 0.9%* FF 449,153,000 = FF 4,042,377
 Worms et Cie: 0.59%* FF 449,153,000 = FF 2,650,002.70
Therefore the Agnellis own in total FF 57, 132,261.60 capital in Perrier

Agnelli Family problems with control of Perrier
 No direct ownership in Perrier, 49.3%...
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