UPDATE 1-French state fund watching Yoplait sale – source

* FSI considering buying Yoplait stake with partner – source

* Government intervention may cool foreign interest – source

* FSI declines comment

(Recasts with comments from source, details)

By Dominique Vidalon

PARIS, Dec 7 (BestGrowthStock) – The battle to win at least half of
Yoplait is taking a political flavour 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.
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For a DEALTAK On Yoplait, click on [ID:nLDE6AM1TZ]
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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. [ID:nLDE6AM1TZ]

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)

UPDATE 1-French state fund watching Yoplait sale – source