(Bloomberg) — Musti Group Oyj has received an offer valuing the Finnish chain of pet care stores at 868 million euros ($954 million) from a consortium of investors including Portuguese retailer Sonae SGPS SA and the company’s management.
Musti’s offer of €26 per share sent the stock up nearly 30% at 10:59am. in Helsinki. The buyer is a consortium that includes Sonae Holdings SA, Musti Chairman Jeffrey David, as well as board member Johan Dettel and CEO David Ronnberg, through Flybird Holding Oy, according to a statement on Wednesday.
Musti caters to pet owners, a group that has been growing in recent decades. It’s also a market that tends to be resilient to economic downturns. In recent years, a new demographic has emerged, with so-called pet parents willing to spend increasing amounts to groom their animal companions.
The Musti Group has more than 340 stores in Finland, Sweden and Norway, including the brands Musti ja Mirri, Musti, Arken Zoo and Djurmagazinet, as well as online stores.
However, the business is not without risks. Musti was recently at the center of a pet food scandal in Finland after cat and dog owners discovered that food sold in its stores was causing symptoms of paralysis in their pets. Some animals became seriously ill and had to be euthanized, according to local media.
Laboratory tests conducted by the company identified a high concentration of glycoalkaloids in foreign potato flakes as the culprit, and the company removed the products from sale. While stocks took a hit initially, they have since recovered.
“Our offer, which represents a premium valuation, reflects our deep belief in the company, the pet retail industry and the Nordic region, as well as Musti’s strong and experienced management team,” said Claudia Azevedo, CEO of Sonae. .
Sonae is a holding company based in northern Portugal controlled by the Azevedo family with a portfolio of businesses including the country’s largest supermarket chain.
The offer price represents a premium of around 27% compared to the closing price of €20.46 on November 28, the last trading day immediately before the announcement. Musti’s non-consortium board unanimously recommended that shareholders accept the tender.
The offer period is expected to begin on or about December 18 and end on or about February 12, with a plan to complete the offer in the first quarter of 2024 pending approval from competition authorities.
To finance the purchase, the buyers have an equity commitment from Sonae, which has arranged “sufficient equity” as well as debt financing from Caixabank SA and Banco Santander Totta SA.
–With the help of Joao Lima.
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