Brazilian meatpacker Marfrig Global Foods is increasing its stake in food processor BRF SA to up to 30%, a source familiar with the move told Reuters, putting the buyer close to the threshold where it would have to make a public tender for all the company’s outstanding shares.
Marfrig previously owned a 24% stake that it acquired last month and was approaching a 30% holding via open market transactions, the source said.
Financial blog Brazil Journal first reported the move earlier on Wednesday.
Marfrig, which produces beef in the United States, Brazil and Argentina, declined to comment on the transaction. Its shares were up 3.1% on the Sao Paulo stock exchange in early afternoon trading.
BRF, the world’s largest poultry exporter, and which also produces pork, also declined comment on the matter.
While BRF’s shares have soared around 12% since Tuesday to trade at a 52-week high, the company said in a securities filing on Wednesday that it was unaware of the reasons behind the sudden spike.
BRF stock was up 4.1% in early afternoon trade.
When Marfrig surprised the market by buying the 24% stake last month, the company said it was only interested in a passive stake in BRF. Yet its stakebuilding comes almost two years after previous failed merger talks between the two companies.
Combined, Marfrig and BRF could be in a better position to take on industry leader JBS SA, although any tie-up could bring risks too.
BRF’s by-laws demand that an investor that reaches a 33.33% stake in the company is mandated to make a tender offer for all of its remaining shares.
Source: Reuters.com