The McCann family's Balkan Investments company has spent almost €2.6 million buying shares in Fyffes shares this week to minimise dilution of their stake as the tropical fruits distributor sold stock to add to its firepower for acquisitions.
Last week, Fyffes, led by executive chairman David McCann, raised a total of €47 million by placing 31.45 million shares, equivalent to 10 per cent of its issued ordinary share capital.
The company, which has a market value of €492 million, said it plans to use the proceeds to “maintain its balance sheet strength” to do more deals after spending almost €140 million so far this year buying two Canadian mushroom companies.
The McCanns’ Balkan Investment vehicle, structured as an unlimited company to keep its financial affairs private, bought 1.7 million shares as part of the placing, according to calculations based off a disclosure to the stock exchange on Wednesday and a company presentation published earlier this month.
Had they not participated in the transaction, their stake would have fallen from 12.1 per cent, as of the end of June, to 10.9 per cent.
Fyffes moved in April to expand its portfolio beyond bananas, melons and pineapples by acquiring two Canadian mushroom companies, Highline Products and All Seasons, in the past six months.
Having made a failed attempt two years ago to merge with American peer Chiquita in what would have been a $1 billion (€900 million) deal, Fyffes has said it “continues to have a strong pipeline of further attractive acquisition and investment opportunities across existing and new product categories”.
Earlier this month, Fyffes reported its earnings before interest, tax, depreciation and amortisation (ebitda) rose to €44 million in the first half from €39.5 million for the same period last year.
However, it said its oldest business, bananas, grappled with “challenging” trading conditions in the first half as the dollar strengthened against the euro.
Balkan Investments also has an 11.6 per cent stake in Total Produce, a supplier of fresh produce from potatoes to tomatoes that was demerged from Fyffes in 2006. Total Produce has a market capitalisation of €527 million.
