rebounded after the feed group followed up the announcement of its failure to
sell its Spanish and Portuguese feed and meat business with the unveiling of
its annual share buyback.
company said it would today begin its process of purchasing shares to cover
stock dividends and employee stock plans, aiming to purchase 1.40m shares at a
cost of about E45m.
The announcement of
the buyback - which broke the company's usual tradition of purchasing shares
around February and March - followed a decline in the stock price on Wednesday
after Nutreco revealed it had been unable to agree a sale of its Iberian meat
and feed portfolio.
The failure of the
sales process, coupled with concerns over raised capacity by rival Biomar in
the fish feed market, prompted KBC analyst Pascale Weber to lower to
"hold" from "buy" her rating on Nutreco shares.
'No fair valuation'
Nutreco blamed its
inability to sell the Iberian assets - which include Nanta, with a 13% share in
the region's compound feed, and Sada, with a 26% share of the Spanish poultry
meat market – on an inability to obtain a satisfactory offer.
"several" prospective buyers indicated that "no fair valuation
could be obtained" for the businesses.
continuously operated with the clear intention that any valuation for the
businesses should reflect their market-leading positions, solid financial
results and future potential," the group said.
which recorded a profit of E23.3m last year, on revenues of E1.4bn, will be
retained in Nutreco as a separate division.
It is not uncommon
for companies to unveil buybacks or dividend rises after an announcement which
could be deemed disappointing, although the scale of the repurchase by Nutreco,
which has 70m shares listed, is relatively small.
Midland, the US agribusiness giant, followed up November's failure of its
GrainCorp takeover bid, which was blocked by Australian officials, with a 26%
However, a Nutreco
spokesman said that while the buyback's timing was linked to the end of the
auction of the Iberian assets, it was because the process while active prevented
the group, under stock exchange rules, from purchasing its own shares.
Furthermore, some investors
had suggested the group be less "mechanical" over the timing of its buybacks, rather
than just begun purchases in February, the spokesman told Agrimoney.com.
"We will probably
continue this practice for coming years," he added, referring to a more liberal
stood 2.2% higher at E31.98 in late deals in Amsterdam.