MARKET TALK: Almarai's Acquisition Move to Secure Feedstock - Shuaa

Sunday, Mar 31, 2013

0732 GMT [Zawya Dow Jones]--Saudi Almarai Co.'s move, as part of a consortium, to acquire Continental Farmers Group is to secure its feedstock, says Shuaa Capital. Almarai owns a 33%-stake in the company that is buying the diversified agricultural producer. "While Ukraine in particular is considered a very attractive destination for farming, the relatively high multiple being paid for the acquisition and relatively small portion attributable to Almarai, we feel the acquisition is unlikely to significantly impact the company's financials," analyst says. Notes this holds particularly true in light of the fact that the larger acquisition of Argentinean feed producer Fondomonte had a positive, but not material impact on feedstock cost. Shares closed +0.4% at SAR67.5 Saturday. (nikhil.lohade@dowjones.com; Twitter: @ZDJnews)

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31-03-13 0735GMT