Bunge CEO says that the new board committee should consider all options
Bunge CEO says that the new board committee should consider all options
The chief executive said Wednesday that a newly formed board committee will consider all options to improve the value of the agricultural giant, but will not bring "preconceived" plans.
The world's largest soybean processor on Wednesday added four new directors to its board of directors, three of which will join the new committee that could open the door to a possible sale.
"We will take an overview of what we are doing, the programs to make us more competitive, our strategy and how to make the most of this with an open mind," Bunge CEO Soren Schroder said in an interview. The committee will meet for the first time in the coming weeks, he said.
The movements of the board are. part of the settlements with two activist investment firms, hedge fund D.E. Shaw & Co. and Continental Grain Co. Those firms have driven Bunge to improve operations and look for other ways to increase their actions, which have lagged behind in the last decade.
The investment firms are not pushing specifically for a sale of the company, but they want it to explore all possible options to improve the value, The Wall Street Journal reported.
Bunge's shares fell 5.6% in mid-morning operations.
The company from White Plains, New York said Wednesday that the committee "will carry out a comprehensive and strategic review focused on improving long-term shareholder value."
Bunge is among the largest distributors worldwide in soy, wheat and corn, which buys crops from farmers, markets them in bulk with livestock operations and food companies, and manufactures products such as vegetable oil and flour.
The 200-year-old company has one of the most extensive agricultural logistics and processing networks in Latin America, which has become one of the largest growing regions in the world.
But a five-year period of low crop prices and high global supplies has challenged grain companies like Bunge, forcing cost cuts and stimulating consolidation talks.
Swiss mining group
PLC and based in Chicago
both of them combinations discussed with Bunge, although neither of them led to an agreement, the Journal has reported.
Schroder told investors Wednesday that the best conditions in the soy processing business were paying off for Bunge. The company reported that its third quarter earnings almost quadrupled compared to the same period of the previous year, increasing to $ 365 million, or $ 2.39 per share, compared to $ 92 million, or 59 cents per share, for the third quarter of 2017 Those results exceeded the expectations of analysts, who had projected $ 2.34 per share, according to Refinitiv.
Prospects for soybean processing will continue to favor Bunge for the remainder of the year, and the company said its agribusiness division remained on track to deliver "top half" profits in the $ 800 million to $ 1 range. one billion
Schroder said in a conference call that profits from his grain buying business are harder to predict, as Brazilian farmers are delaying anticipated sales due to the strengthening of the country's currency, while "farmers in North America they really seem to be very steadfast in their record harvest. "
Bunge's new board appointments will expand its board of 11 people to 15. Three new directors: Continental Grain CEO Paul Friborg, Flatwater Partners founding partner Gregory Heckman, and the president of Pacific Point Capital LLC, Henry "Jay" Winship, will join the board on Wednesday. One more director, agreed by Continental, D.E. Shaw and Bunge will join the board by the end of the year.
The new strategic review committee will be chaired by Mr. Friborg and will include the two new directors, as well as the three members who are already part of Bunge's board.
Mr. Friborg and Mr. Heckman bring experience in agricultural trade. In Continental, Mr. Friborg presided The sale in 1999 of its commercial network of grains. to Cargill Inc., based in Minnesota, Mr. Heckman, who previously served as CEO of Gavilon, a grain company based in Omaha, supervised the sale of that firm to Japan
Marubeni
Corp.
in 2013.
Write to Jacob Bunge in jacob.bunge@wsj.com and Kimberly Chin in kimberly.chin@wsj.com
Corrections and Amplifications
Bunge plans to add four new board members in an agreement with activists, three of whom were appointed on Wednesday and one more who will be appointed by the end of the year. The headline and the first paragraph of this article said earlier that the agreement with activists would add three new board members. (31 October)
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