French state fund watching Yoplait sale: source

By Dominique Vidalon

PARIS (BestGrowthStock) – The battle to win at least half of Yoplait is taking a political flavor as French state-backed strategic investment fund FSI is considering buying a minority stake in the world’s second-largest yoghurt maker, a source said.

The sale is closely watched for signs of government intervention as it involves a dairy sector declared “strategic” by France in 2005 amid speculation of a bid from Pepsico (PEP.N: ) for Yoplait’s French rival Danone (DANO.PA: ).

Sovereign fund FSI — set up in 2008 to help shield French companies from the economic crisis — declined to comment.

“The FSI is looking very closely at the dossier,” a source close to the matter said, stressing that Yoplait employed 1,400 people and was a great brand.

The FSI, which has a strategy of buying minority stakes in the companies it invests in, could “participate” in the Yoplait sale together with a partner, the source said.

That future partner could be an industrial player or a private equity buyer, he added.

Unlisted Yoplait has been in the spotlight since the summer when private equity fund PAI Partners said it wanted to sell its 50 percent stake [ID:nLDE689103].

The sale is expected to draw interest from a wide range of players including emerging market buyers, private equity players and food giants such as General Mills (GIS.N: ), Nestle (NESN.VX: ) and Lactalis, Europe’s largest dairy group.

France’s Lactalis – whose unsolicited 1.4 billion euro bid for the whole of Yoplait was rejected last month – had presented its bid as the best way to keep Yoplait in French hands.

“The dossier is becoming increasingly political which may cool the interest of some potential buyers, notably foreign groups,” another source close to the matter warned.

Last month when asked by French daily Liberation of the possibility of Yoplait falling into foreign hands, Agriculture Minister Bruno Le Maire said: “Our concern is to make sure the interests of French producers and the jobs in our agro-food industries are well protected.”

PAI expects to receive expressions of interest in January or possibly as early as December but pre-sale documents have yet to be sent to potential buyers.

(Reporting by Dominique Vidalon; Editing by Jon Loades-Carter)

French state fund watching Yoplait sale: source