(Bloomberg) -- Dutch coffee company Jacobs Douwe Egberts BV offered S$1.45 billion ($1 billion) to buy Singapore's Super Group Ltd., extending a caffeine empire backed by Europe's billionaire Reimann family into Asia.
The all-cash offer of S$1.30 a share by the closely held company is 34 percent more than Super's share price on Oct. 31, before it was halted from trading. Shareholders of Super who hold about 60 percent of its share capital have made an irrevocable pledge to tender all their stock, the Singapore-based company said Thursday.
Super is the latest in a string of coffee and food brands to be amassed by the Reimann family's JAB Holding Co., whose investments include Jacobs Douwe Egberts, Peet's Coffee & Tea, Keurig Green Mountain and Krispy Kreme Doughnuts Inc. The planned takeover marks the acquirer's first foray into Asia, according to Gregory Yap, an analyst at Maybank Kim Eng Holdings Ltd. It would add the Super and Owl brands of instant coffee as well as NutreMill cereal mix sold primarily in Southeast Asia.
The acquirer “has been buying up coffee businesses all over the world and it looks like they are covering the whole chain, from cafes to brewers and now instant coffee,” Yap said by phone. “This seems to be the Asian piece of the portfolio for them.”
Shares of Super rose 30 percent to close at S$1.26 in Singapore, extending their gains this year to 50 percent and giving the company a market value of S$1.4 billion.
Asian Foothold
Super has about 1.6 percent of global instant-coffee market share, compared with Nestle SA's 41.9 percent, according to data from Euromonitor.
The Singapore company would provide an “immediate foothold” in Asia and that explains why a relatively high premium is being offered, said Jonathan Seow, an analyst at CIMB Securities Pte. in Singapore.
“Super is a strong number 2 in this sector in the region,” Seow said. “Number 1 is Nestle, and JAB can't possibly buy Nestle.”
Both Yap and Seow said the takeover would benefit Super as well. The analysts said Super being part of a larger global group would help it reduce procurement costs and enter other markets.
Super's shareholders include Yeo Hiap Seng Ltd. with a stake of about 11.7 percent. Separately, Yeo Hiap Seng, a Singapore-based maker of food and beverages, said the company will tender its shares and expects to realize a gain of about S$138.35 million.
The offer is dependent on receiving more than 50 percent of voting rights and regulatory approval being met by May 3, 2017, according to another filing to the Singapore exchange. Jacobs Douwe Egberts would make a compulsory offer for the rest of the company and delist it if acceptances reach at least 90 percent.
Jacobs Douwe Egberts is majority owned by an indirect subsidiary of JAB. Mondelez International Inc., the U.S. maker of Oreo cookies, is a minority shareholder of Jacobs Douwe Egberts. BDT Capital Partners LLC, the investment firm headed by Byron Trott, also holds a stake in the coffee company.
Four of the Reimanns each have a net worth of about $3 billion, according to the Bloomberg Billionaires Index. JAB also has invested the Reimann fortune in a variety of consumer-goods companies, such as cosmetics giant Coty Inc. and Durex condom maker Reckitt Benckiser Group Plc.
--With assistance from Ruth David Joyce Koh Matthew Boyle and Leslie Patton To contact Bloomberg News staff for this story: Rachel Chang in Shanghai at wchang98@bloomberg.net, Sebastian Tong in Singapore at stong41@bloomberg.net. To contact the editors responsible for this story: K. Oanh Ha at oha3@bloomberg.net, Lena Lee, Paul Jarvis
With assistance from Sebastian Tong, Rachel Chang
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