Bounty Fresh to acquire New Zealand poultry producer

MANILA, Philippines — Bounty Fresh Food of the Philippines, the poultry company founded by low key businessman Tennyson Chen, has moved a step closer to acquiring the Tegel Group, New Zealand’s biggest poultry producer, in a $309 million takeover bid which marks yet another global acquisition by a Philippine company.

This as Tegel Group’s independent directors unanimously recommended that shareholders accept Bounty’s offer made last April.

In a June 11 letter to shareholders posted on the Australian Stock Exchange, Tegel Group independent chairman David Jackson narrated the recommendation of the independent directors.

He said the independent directors unanimously recommend that shareholders accept the Bounty Offer because the offer price is fair and within the range assessed by the independent directors for the current value of Tegel shares; that the offer price represents a premium to Tegel’s undisturbed historic trading price; that the offer’s 50 percent minimum acceptance condition has already been satisfied, and that Bounty will have effectively majority control of Tegel if the offer is declared unconditional.

Jackson also said it is unlikely that there would be a competing offer because Bounty, which already has a 16.3 percent share in Tegel, would have majority control once the offer for 46.1 percent of Tegel shares is completed.

In April, Bounty Fresh, through its subsidiary Bounty Holdings New Zealand, mounted a NZ$437.8 million or roughly $309 million offer for Tegel, which comes at a challenging time for the New Zealand company amid a glut in domestic chicken supply. The offer period would run until Aug. 25.

Tegel’s 45 percent shareholder, Claris Investments, had already accepted the offer, Tegel said in earlier disclosures.

The bid was part of Bounty’s expansion strategy outside the Philippines.

Founded in the 1980s by Chen, Bounty Fresh started in a one-layer house in Sta. Maria, Bulacan, Philippines with an initial 5,000 heads of chicken.

From a 5,000-head layer farm, the business grew to be one of the largest broiler integrators in the country. It is the only fully-integrated poultry company that has continuously invested in company-owned facilities – grand parent farm, parent stock farm, hatcheries, dressing plants, feed mills, and cool-cell broiler complexes in the Philippines, the company said in its profile.

It is the first company in the Philippines to put up a single-stage commercial broiler hatchery, a technology that ensures better hatchery sanitation with controlled ventilation that will, in turn, produce better chick quality.

To cater to the consumers in the various regions and islands of the archipelago, Bounty Agro Ventures Inc. (BAVI) was integrated to operate in several branches across the country.

In 2008, BAVI rolled out rotisserie outlets selling Chooks-to-Go, its oven roasted chicken brand, along with the company’s banner processed meat products, roasted pork belly, dressed chicken and other derivative products.

In just two years, Chooks-to-Go became the dominant market leader in the rotisserie business with close to 1000 outlets.

In 2010, Chen was named the Entrepreneur of the Year Philippines.

Today, Bounty is one of the largest poultry companies in the Philippines with vertically integrated farm-to-plate operations.

Tegel, which is listed in the Australian and New Zealand stock exchanges, meanwhile is touted as an iconic New Zealand heritage brand. Founded in 1961, it is New Zealand’s largest poultry producer.