Deoleo's board decided yesterday how it will answer all the buy offers that it has received from investment funds interested in taking over its food oil company. In the end, pressures from the Spanish government had the effect that Rajoy intended: Deoleo will end up being owned by Spanish shareholders. The efforts were a clear pre-election campaign move.
Kutxabank, Unicaja and Caixabank will still own 20% of Deoleo. And the government has pressured old savings banks, which comprise a block of Spanish investors, to keep their positions. The fund CVC, which owns parts of Abertis, Cortefiel and Grupo Zena, now owns 30% of Deoleo. Dcoop (formerly Hojiblanca) is not happy with this result, because the firm wanted to have 10% of Bankia. This will lead to problems as CVC struggles to increase its share. Selling Deoleo at 0.38 euros per share values the oil company at 439 million euros, a price that is four cents per share under its current value. This valuation makes the deal very attractive. It is possible that CVC will end up with the lion's share of Deoleo, which was its goal. Once the deal is finalized, the company will have to raise funds in order to restructure its debt load, which has risen to 614 million euros.
In this sense, it is good news for Deoleo and the Andalusian economy that the company underwent some turmoil and now has a chance to clean itself up. The cleanup could have been done without government meddling, however, which will end up costing taxpayers.
