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Continental Grain getting impatient with Bunge

Continental owns more than 1% of Bunge, but isn't interested in being involved in potential takeover.

by Scott Deveau and Simon Casey 

Continental Grain Co. has filed with regulators about a previously undisclosed position in potential takeover target Bunge Ltd. and plans to hold discussions with the U.S. agricultural-commodity trader about a possible sale, according to people familiar with the matter.

Continental, which owns more than 1% of Bunge, believes the company could be worth at least $90 a share in a takeout and is getting impatient with management for not delivering as potential buyers circle, said one of the people, who asked not to be identified because the deliberations are private.

New York-based Continental isn’t interested in being involved in any potential takeover of the company, one of the people said, but it may have interest in acquiring certain assets that could be shaken loose to satisfy antitrust concerns.

The two parties were granted early termination under the U.S. Federal Trade Commission’s Hart-Scott-Rodino Act, according to a filing that appeared on the agency’s website Monday. The FTC filing is required when an investor buys shares in a company above a certain threshold and seeks to hold talks with that company about things such as strategy. Continental declined to comment on the filing while Bunge didn’t immediately respond to messages seeking comment.

Archer-Daniels-Midlands Co. is in talks to acquire Bunge, which has a market valuation of about $11 billion, people familiar with the matter said last month.

Another potential suitor, Glencore Plc, is free to make a hostile bid for White Plains, New York-based Bunge after the lapse of a standstill agreement that barred the Swiss commodities trader from making an unsolicited approach. That arrangement followed talks between the two companies in early 2017, when Glencore made an informal approach to discuss a merger.

Bunge’s shares rose 3.8% to $77.99 in New York on Monday.

Closely held Continental invests in agricultural businesses and has a history of agitating for changes at some of those companies. In 2013, for example, it urged Smithfield Foods Inc. to split its business into three parts in order to unlock value for shareholders. Continental eventually agreed to support a $4.7 billion takeover of the pork supplier by Shuanghui International Holdings Inc., now known as WH Group Ltd. 

--With assistance from Mario Parker.To contact the reporters on this story: Scott Deveau in New York at [email protected]; Simon Casey in New York at [email protected]

To contact the editors responsible for this story: Elizabeth Fournier at [email protected]

Patrick McKiernan

© 2018 Bloomberg L.P

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