Parmalat reprieve: court crimps Lactalis ambush

Posted by Nicole Eckersley on 12th April 2011

milk.jpgAn Italian court has backed Parmalat’s plan to delay a shareholder meeting that would likely have seen France’s Lactalis assume a greater role in the management of the Italian dairy firm, which owns Australian dairy giant Paul’s.

Lactalis, which took a 29% stake in Parmalat last month, was expected to gain majority board representation at the company’s annual shareholder meeting – originally scheduled for the end of April – after it proposed a slate of directors for nomination to Parmalat’s board.

However, Parmalat said that it would delay its AGM by two months after the Italian government introduced a law specifically designed to allow the company to do so. In this time, it is hoped that a consortium of Italian shareholders can be formed to block Lactalis’ bid for control of the group.

Lactalis challenged the legality of Parmalat’s move. However, the Court of Parma yesterday revealed that it has backed Parmalat and concluded that the move to reschedule the AGM is “in compliance” with decree law No. 26, the law introduced to allow Parmalat’s delay.

European antitrust bodies have confirmed that they are “observing” the increasingly rancorous battle for control of Parmalat.

Despite fears within Italy that Parmalat would fall into foreign ownership with Lactalis’ 29% buy-in, Lactalis has insisted that it was not looking to take 100% ownership of Parmalat. However, the French firm did reveal that it is eyeing majority board representation by proposing a slate of its own candidates for nomination to the company’s board. Lactalis said that by increasing its sway over Parmalat’s strategic direction, it expected to grow the group’s brands, improve performance and foster a closer relationship with Lactalis’ own global businesses.

With Parmalat’s annual shareholders meeting – when Lactalis would be able to put forward its board nominations – due at the end of this month, the Italian government interjected and introduced a law allowing Parmalat to delay the AGM.

However, a spokesperson for the European Commission, Europe’s antitrust regulator, confirmed that officials are “closely monitoring events”.

“There are some concerns that the Italian government could act in breach of European agreements on competition and the free movement of capital. However, no conclusion has been reached,” a spokesperson told just-food. “We are currently simply observing developments at this stage.”

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