Osem Investments, the Israeli food group, has rejected claims from local consultancy Entropy that Nestle’s proposed takeover of the business undervalues the company.
According to Reuters, Entropy, in a report the firm prepared ahead of a shareholder vote on the deal on 17 March, has said the value of Nestle’s bid is too low and less than the food giant#s other recent transactions.
Nestle last month proposed a deal to acquire the remaining shares in Osem Investments for ILS3.3bn (US$840.5m). A deal would give Nestle the remaining 36.3% of Osem as it already holds a 64% stake in the business.
Entropy said the deal gives Osem an enterprise value of 13.4 times earnings before interest, tax, depreciation and amortization, compared with an average multiple of 15.6 for Nestle’s eight large deals in the past 15 years.
In a stock exchange filing, Osem rejected the argument adding it viewed the deal as “fair”.
Nestle declined to comment when approached by just-food.