Commercial Court Backs Barclays and Doux

FRANCE - The Commercial Court of Quimper has thrown out a takeover bid by the consortium Sofiprofitéol for the beleaguered poultry processing company Doux and has extended the observation period at the end of November.
calendar icon 3 August 2012
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The extension of the observation period on the company appears to favour the solution put forward by the CEO of Doux, Charles Doux to place a majority of the shares, believed to be about 80 per cent, in the hands of Barclays Bank and for the Doux family to retain a 20 per cent share in the company.

The decision of the court came on Wednesday, 1 August, exactly two months after Doux went into receivership.

The Commercial Court of Quimper extended th observation period until 30 November with a progress report scheduled for 9 October.

The court had heard that the leading poultry company in France was losing about €30 million a year and had run up debts of more than €430 million.

The company had a turnover of € 1.4 billion.

The company employs 1,576 people in seven plants, with the major centres at Pleucadeuc (407 employees), Laval (303) and Blancafort (283).

In the absence of tenders submitted to the court on 10 August, this activity will be liquidated.

This decision rejects the off from the consortium led by Sofiprotéol, which brought together such Glon Sanders, Tilly-Sabco, Duc and LCD.

In a statement, Sofiprotéol said: "The various participants involved in the takeover offer of Doux coordinated by Sofiprotéol regret that their proposal has not been accepted, so far, by the Commercial Court of Quimper, on questionable legal grounds.

This offer, which was based on a long-term industrial project, protected the interests of group, industry and agriculture. It brought a solution to the claims of 800 farmers and offered employment to 3078 employees of Doux, including employees of "Doux Frais", while the liquidation of "Doux Frais" issued today affects 1,704 employees.

"The offer coordinated by Sofiprotéol brought transparency to employees and farmers that is missing from the scheme favoured by the Tribunal.

"This offer indeed brought together key industrial players in the French poultry industry, established in the region: Glon-Sanders (subsidiary of Sofiprotéol), Duc, Guernevez Participation, Hendrix Genetics, LDC, Terrena, Tilly-Sabco and Triskalia and the CAVAC cooperatives and BWC.

"It covered all areas of the Doux group, linking them through trade agreements and ownership. It was a real industrial project, designed to cope with international competition and to strengthen the production of fresh produce for the French market at the expense of exports.

"This offer brought, finally, a solution to the repayment of debts of farmers and also foresaw a continued activity with haulage companies and compensation for their claims.

"The different players in the supply chain coordinated by Sofiprotéol have expressed deep concern about the evolution of the French poultry industry and the future activities of the Doux group."

However, some of Sofiprotéol's members, including LCD and Duc, are now expected to reformulate their bids. For others, the opportunity exists to join the plan put forward by Charles Doux, president of the company, and Barclays, who holds the purse strings, for the continuation of the company.

This plan, which would preserve 3,185 jobs, according to Charles Doux, and sets out a provision for the British bank to convert its debt into €140 million in capital, replacing the Doux family as majority shareholder.

The president of the French farmers' union FNSEA, Xavier Beulin, said: "We acknowledge the court and call Charles Doux to respect its commitments to farmers."

However, he said that there were many gray areas, and he feared the worst for the future of the French poultry industry.

"I take note of the court (...) and I will not pass judgment on the judgment. I will make just two observations: we now know who are the interlocutors in this case namely Charles Doux and Barclays Bank. So tomorrow we will ask and we will ensure that Charles Doux agrees to make every effort for the problem of farmers' claims to be resolved as quickly as possible. To this I add that we will also have guarantees on the continuation plan."

He added: "What surprises me the most is that ministers, farm leaders and all those who followed the issue closely agreed thata that ao refocus some of the production onto the domestic market had to be found thus reducing costs. By removing this part of the activity, the group will naturally focus on export which does not contribute, we believe, to a sustaisustainablee for the industry."

He continued: "Without prejudging the attitudes of the partners of Doux, I do not think Barclays has wanted to invest sustainably in poultry. I fear that we might in a few months see a second dramatic episode."

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