Hortifrut has agreed to a move from existing shareholder The Public Sector Pension Investment Board (PSP Investments) to significantly up its stake in the Chile-based fruit processor.
The bid could be a precursor to PSP taking control of the company.
PSP is one of Canada’s largest pension investment managers with CAD230.5bn (US$160.02bn) of net assets under management as of 31 March.
In a statement, fresh and frozen berry specialist Hortifrut said PSP has made a tender offer for $1.63 per share of the company, representing a 95% premium over the market price as of 15 December, for the outstanding shares in the company. It said the controlling group of Hortifrut had agreed to the offer.
PSP has been an investor in Hortifrut since 2018 and owns 4.88% of its share capital. The transaction will be successful if PSP reaches a 36% equity ownership in Hortifrut. Otherwise, the offer will lapse.
If the bid is successful, the controlling group – comprising the Moller, Quevedo, Del Río and Elberg families – would maintain at least 50.1% ownership. If all other Hortifrut shareholders accept the offer to sell their shares, PSP could reach up to 49.9% equity ownership in the company.
The transaction is expected to close in the first four months of next year and the parties have said if it is successful Hortifrut would cease to be a listed company.
The controlling group would also retain its right to elect the majority of Hortifrut’s board.
Both parties have agreed to a one-year lock-up period on completion of the tender offer. In the three years after the lock-up period expires, the controlling group will have the right to sell Hortifrut shares to PSP on the condition its ownership in the company does not fall below 35% and that PSP Investments’ total deployment, including potential future equity injection in the business, does not exceed $660m.
Andrés Solari, Hortifrut’s vice president, said: “We believe this partnership will be productive over the long term. With a shareholder of the nature of PSP Investments, the company should be in a better position to consolidate its leadership in the fruit industry and strengthen its commitment to innovation, the environment, our collaborators, and the communities where we operate.”
Marc Drouin, senior managing director, real assets and global head of natural resources investments at PSP, said: “We are pleased to strengthen our long-standing partnership with Hortifrut and the families behind what we consider an industry leader with a quality management team and diversified operations that maintain ESG standards among the highest in the sector.
“This proposal reflects both the respect we have built up for the Hortifrut business since our first investment in 2018 and our desire to continue expanding our global footprint in the agriculture sector alongside best-in-class management teams and partners who share our commitment to responsible and sustainable investment. With our combined expertise and support, we believe Hortifrut can continue growing its leadership position in the global berry industry.”
Hortifrut operates in 13 countries on four continents. Its products are sold in 37 markets.
Its growth has been aided by acquisitions, including a deal to buy Spain-based blueberry business Atlantic Blue in October last year for EUR241m ($280.8m at the time).
