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China’s Bright Dairy to raise $1.45 bln, buy Tnuva from state-owned parent

June 10, 2015
Consumer Packaged Goods
(Reuters) – Chinese milk producer Bright Dairy & Food Co Ltd plans to raise up to 9 billion yuan ($1.45 billion) from select investors to buy Israeli food firm Tnuva from its state-owned parent, Bright Food Group Co Ltd , the company said.
 
The acquisition would enable Bright Dairy to expand abroad, and bring Tnuva’s high-end dairy products and production technology into the Chinese market, Shanghai-based Bright Dairy said in an exchange filing late on Monday.
 
Bright Dairy plans to sell up to 559 million China “A” shares in a private placement at 16.10 yuan each, a discount to the stock’s last trading price of 19.84 yuan, to buy Bright Food Group’s entire stake in Bright Food Singapore Investment Pte Ltd, an investment vehicle which controls Tnuva.
 
The stock, which has been suspended from trading for three months pending the announcement, rose its 10 percent maximum when it resumed trading on Tuesday.
 
Several listed firms have recently purchased assets from their state-owned parents as China’s government increasingly uses the capital markets to reform its enterprises.
 
Parent Bright Food Group started the process to buy Tnuva in May last year from private equity firm Apax and Partners . It completed the deal earlier this year and now holds around 76.7 percent of Tnuva, Israel’s largest food company.
 
Israel’s Mivtach Shamir Holdings, another major shareholder in Tnuva, said last year that the deal valued all of the dairy company at about $2.5 billion, up from $1 billion when Apax and Mivtach took control in 2008.
 
($1 = 6.2053 Chinese yuan renminbi) (Reporting by Samuel Shen and Sue-Lin Wong; Editing by Adam Jourdan and Miral Fahmy)

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