Aryzta could buy greater Picard share with proceeds from Origin sale

Aryzta could buy greater Picard share with proceeds from Origin sale

Bakery group Aryzta has confirmed that it will sell its remaining 29% stake in Irish agribusiness Origin Enterprises by the end of the month via a placing to institutional investors.

Aryzta first began the process of offloading its stake in Origin at the end of March. According to MainFirst analyst Alain Oberhuber, the sale will raise between EUR220m (US$245.4m) and EUR230m after the deduction of costs. Arzyta will sell its remaining Origin shares at a price range of EUR6.20-6.50 or at a discount of 8.9% to 4.4% to yesterday's (24 September) closing price.

Oberhuber said he expected the sale to trim around 1-2% off Aryzta's earnings per share in fiscal 2016 and 2017. He added: "There is no impact on Aryzta's enterprise value but the debt multiples will improve with net debt/EBITDA [fiscal 2016] from 2.5x to 2.1x."

Oberhuber suggested Aryzta "wants to build up cash" to fund further investment in French frozen food retailer Picard. The baking group took a 49% stake in the company from Lion Capital at the end of March for EUR446.6m.

Click here for our analysis of Aryzta's move to invest in Picard.