Citigroup Inc declined to work on an Italian government-backed bid for Spain's Deoleo, the world's biggest olive-oil bottler, because of concern that the deal would deeply anger the Spanish government, two people with knowledge of discussions told the Wall Street Journal.
On Friday, it was confirmed that the Deoleo board agreed to sell the company to UK private-equity firm CVC Capital Partners. The deal involves CVC acquiring 29.99% of Deoleo held by a number of Spanish banks, afterwhich it will move to buy the rest of the business.
The company was put up for sale last year by its top shareholders, a group of Spanish banks, and people familiar with the situation told the Wall Street Journal that several private-equity firms and Italy's state-owned Fondo Strategico Italiano presented offers.
Yesterday, the WSJ reported that Italy's state-backed Fondo Strategico Italiano asked Citigroup to advise it on a bid for Madrid-based Deoleo. The news source says that a senior Citigroup executive contacted a well-connected political adviser in Madrid, who warned that supporting an Italian bid would not be well received.
And thus Citigroup declined the work on the back of this, says the WSJ.
A person at the bank denied that it had considered representing FSI. The Italian fund declined to comment.
© 2014 - European Supermarket Magazine by Enda Dowling
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