Louis Dreyfus keeping options open

by World Grain Staff
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LAUSANNE, SWITZERLAND — Louis Dreyfus Commodities is taking steps to ensure that it is ready for the possibility of either a stock market listing or a partial sale to a strategic investor, The Financial Times newspaper reported on April 2.

In a rare interview, Margarita Louis-Dreyfus, majority shareholder, told the newspaper that the 163-year-old trading house did not want to abandon its privately owned status and had no immediate plans for an initial public offering but had to be ready for every eventuality.

“The message is clear: we will do what’s best for the company. And if at a given moment we find — not for financial but for strategic reasons — that we have to work with a partner or the stock market, then we’ll be ready,” she told the newspaper at its FT Commodities Global Summit in Lausanne, Switzerland.

Louis Dreyfus Commodities is part of the “ABCD” group of companies that also includes Archer Daniels Midland Co., Bunge and Cargill. 

Recently, Louis-Dreyfus has taken steps to align its business model more closely to that of a publicly listed company, including the upcoming appoint of three non-executive directors.

“People don’t want to believe it is possible to just keep all our options open. But right now that is the best approach for the company,” Louis-Dreyfus told the newspaper.

The multibillion-dollar stock market flotation of Glencore in 2011 raised expectations that rival traders would follow suit. That has not proved the case.

The agribusiness sector has seen a wave of consolidation in the past two years, with Glencore spending $6 billion to buy Canada-based grain trader Viterra, and Marubeni, the Japanese trading house, spending $2.7 billion, excluding debt, for the U.S.-based grain trader Gavilon.

COFCO and Noble announced on April 2 plans to create an agribusiness joint venture. ADM bid for GrainCorp of Australia in a $3 billion deal that was subsequently rejected by Canberra on national interest grounds.

“In order to survive, companies are aligning with each other for strategic reasons. I would say that if the moment comes when . . . we can no longer withstand external pressures, we will have to be smart and prepared,” Louis-Dreyfus told The Financial Times.

Louis-Dreyfus noted that a disadvantage of public companies is the exposure to the “mood of the market” and the “short-term delivery of profits.”

Nevertheless, Louis Dreyfus Commodities had to be “pragmatic”, she told the newspaper. She also said the listing of BioSEV, its Brazilian sugar subsidiary, had been a positive experience for the company and had provided deeper access to capital markets.


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