Ontex’s Top Investor Weighs Buyout of Diaper Maker

(Bloomberg) -- Groupe Bruxelles Lambert SA is considering a bid to take diaper maker Ontex Group NV private, according to people familiar with the matter.

The Belgian investment firm has held on-and-off talks with potential partners, including private equity firms and owners of similar brands, about a deal to buy out Ontex's minority shareholders, the people said. It's already Ontex's biggest investor with a 20% stake.

Shares in Ontex rose as much as 14% on Thursday. The stock was up 12% at 9:08 a.m. in Brussels, giving the company a market value of about 546 million euros ($606 million).

Deliberations are ongoing and there's no certainty of a deal, the people said, asking not to be identified discussing confidential information. A representative for GBL declined to comment, citing a quiet period. The company is scheduled to report its 2021 results on March 10. A spokesperson for Ontex declined to comment.

Ontex reported a 27% drop in adjusted earnings before interest, taxes, depreciation and amortization for 2021, blaming unprecedented raw material and operating cost inflation. It said in February that considerable uncertainty surrounded the outlook for commodity, freight and packaging costs. Russia's invasion of Ukraine has since unleashed more turmoil in the global commodity markets.

Ratings agency Moody's Investors Service this week downgraded Ontex to B2 from B1 in part because of an “expectation that Ontex's profitability will be strained by continued high input costs.”

In 2018, when it had a market value of 1.6 billion euros, Ontex rejected a takeover offer from private equity firm PAI Partners as too low. Esther Berrozpe Galindo took over as the company's chief executive officer at the start of 2021.