Parmalat asks to pay less for Lactalis American Group, US arm of majority shareholder Lactalis

Parmalat asks to pay less for Lactalis American Group, US arm of majority shareholder Lactalis

Parmalat has requested it ends up paying less for Lactalis American Group, a sister company and US arm of majority owner Lactalis.

The board of the Italian dairy processor has asked for a cut of US$144m to the $904m it paid for Lactalis American Group last year.

Lactalis owns 82.2% of Parmalat and the deal, struck last year, has proved controversial with the rest of the Italian firm's shareholders, who argue it is not in the business's interest.

The request comes after a court-appointed advisor, Professor Angelo Maranesi of the University of Bologna, PwC and an independent panel analysed the price the company paid for Lactalis American Group. The panel argued US$2.3m in non-recurring costs and a further $13.3m - the difference between marketing costs budgeted for and those actually spent - should be deducted from Lactalis American Group's EBITDA.

Parmalat said it would now discuss its request with Lactalis, with a decision expected by the end of the month. Indepedent auditors would then look to define the price if Parmalat and its majority shareholder cannot reach a deal.

Parmalat, meanwhile, also revealed the financial impact of last month's ruling by a court in Rome to order for the company to give back its 75% in Italian milk firm Centrale del Latte di Roma to the City of Rome.

The ruling on a deal struck in 1998 forced Parmalat to pull its 2012 accounts and, on Friday (10 May), it provided a revised net profit and dividend.

Parmalat, which is appealing the ruling, said its 2012 net profit would fall from EUR143.2m (US$186.5m) to EUR48.1m. The company also cut its proposed dividend by two-thirds.

"Parmalat appealed this decision in the firm belief that its position is sound. Furthermore, it is confident as to the outcome for the final disposition of the ownership of Centrale del Latte di Roma or, as a minimum, the award of adequate compensation," it said.