Hochdorf shareholder Newlat pushes for radical restructuring
Published: Friday, May 3rd 2024, 14:30
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A power struggle is looming at ailing milk processor Hochdorf. The recently acquired major shareholder Newlat from Italy wants to replace the entire Board of Directors with its own candidates and push through a radical restructuring.
Hochdorf has been in a bad way for some time. In particular, high debts as a result of bad investments are weighing on the company. The management has therefore been looking for a buyer for some time. However, the ongoing efforts have not yet been crowned with success.
Most recently, Hochdorf had only focused on the sale of its operating subsidiary Swiss Nutrition (HSN), as a sale of the entire group including debt was considered unlikely. In the event of a partial sale, however, the existing shareholders are threatened with a total loss.
As a result, Hochdorf's shares have recently collapsed and until a week ago were worth just over one franc. To put this in perspective: they were still worth over 300 francs in 2017.
At this very moment, the Italian food group Newlat became a new major shareholder in Hochdorf. Newlat apparently bought out the previous investor Bermont Investments' share package of just under 11 percent. Following the announcement of the investment, Hochdorf's share price shot up and was back to just under 11 Swiss francs on Friday afternoon.
Hostile takeover attempt in the offing
What initially looked like a rescue in distress could, in retrospect, turn out to be the beginning of a "hostile takeover". Because Newlat followed up on Friday: The Group is proposing that the entire Board of Directors be replaced with its own candidates at the Annual General Meeting to be held in two weeks' time. Angelo Mastrolia, who is also Executive Chairman of Newlat, will be proposed as Chairman of the Board of Directors.
According to Mastrolia, Hochdorf needs a "radical" change in its corporate strategy. In an interview with the news agency AWP, he particularly opposed the plans to sell the subsidiary HSN. At the same time, he was open to various options regarding Newlat's future participation in Hochdorf, including a complete takeover.
A takeover of Hochdorf would certainly fit in with Newlat's existing portfolio. Newlat generates around a third of its annual turnover of almost 800 million euros with dairy products. However, the company is not yet operationally active in Switzerland.
Specialized in troubled companies
Hochdorf also corresponds to Newlat's target profile in other respects. The company, which was only founded in 2004, had already acquired ailing traditional companies in the food sector in the past. Initially, Newlat was only active in Italy. In 2014, the group then expanded abroad by taking over the pasta producer Birkel in Germany, which had been rocked by various scandals.
Most recently, Newlat also expressed interest in the British food and beverage group Princess, which is also deep in the red. However, Newlat withdrew its offer for the time being, as the asking price was considered too high.
Representatives of the Swiss dairy industry and other major Hochdorf shareholders have so far declined to comment on Newlat's advances. The Swiss Milk Producers' Association (SMP) merely emphasized that "SMP and all Swiss milk producers are interested in Hochdorf continuing to process and market a lot of milk in Switzerland with good added value." As the restructuring is still ongoing, it is still too early to take stock.
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