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Strategies & Market Trends : Speculating in Takeover Targets
ULBI 11.92+1.2%3:59 PM EDT

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To: richardred who wrote (3671)6/14/2015 6:12:31 PM
From: richardred  Read Replies (1) of 7075
Sales are up, but once again hedging did them in. Massimo Zanetti started trading on the Milan bourse on June 3 at an IPO price of 11.60 euros. They bought the heavenly coffee.
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UPDATE 3-Coffee group Massimo Zanetti to use flotation cash for acquisitions

* First coffee maker to list in Italy

* To offer up to 35.6 percent to raise 192 mln euros

* Share offering starts Monday, runs to May 28

* Other Italian food companies could follow (Adds Italian food companies that could consider listing)

By Francesca Landini and Elisa Anzolin

MILAN, May 18 (Reuters) - Italian coffee maker Massimo Zanetti Beverage (MZB) plans to use proceeds from its stock market listing for acquisitions in a bid to turn the family-owned business into a stronger international player.

MZB, which last week priced its shares at between 11.60 euros and 15.75 euros apiece to value the company at up to 540 million euros ($613 million), said on Monday it was looking at two markets where it could invest the flotation proceeds.

"We are looking at potential acquisitions to expand in two countries where we feel we are not growing fast enough," Chairman and owner Massimo Zanetti said, adding he would target well-established brands.

Headquartered near Venice, MZB already owns more than 20 coffee brands around the world including Italy's market leader Segafredo Zanetti, Chock Full o'Nuts in the United States and Britain's Puccino's.

It generates 90 percent of its sales abroad.

The listing of up to 35.6 percent of MZB will make it the first coffee maker to join the Milan bourse, allowing it to pay in shares for acquisitions and smooth succession plans when the 67-year-old chairman retires, a person involved in the IPO said.

The person said the listing had been a difficult decision for Zanetti who felt "like giving his daughter away at the altar."

If fully underwritten, the float will reduce Zanetti's stake to 64 percent. He said he was ready for further reductions in his holding to fund acquisitions.

Many Italian entrepreneurs are loath to loosen their grip on a company they founded even if this puts a brake on growth.

MZB's domestic rivals Illy and Lavazza are both family-owned with no plans to open their companies to other shareholders. However, a successful MZB listing could encourage others in the food sector to go public, bankers said.

"I hope others will follow my lead," Zanetti said.

Dairy company Granarolo, organic honey maker Rigoni di Asiago and tomato pulp producer Mutti could consider listing on Milan's bourse in the next few years to help growth, top executives for the three firms said separately on Monday.

MZB, which had 2014 net revenue of 781 million euros, sells products ranging from mass-market packs to coffee pods and produces 120,000 tonnes of coffee a year. It plans to pay out between 25 and 30 percent of profits as dividends, top executives said.

Investors will be offered up to 11 million new and existing MZB shares. The debut on the Milan bourse is set for June 3.
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