The tussle concerns an attempt by minority shareholders to sell nearly 17 per cent of the group’s holding firm to Margarita Louis-Dreyfus, who took over the 166-year-old trading house after her husband died in 2009 and controls around 80 per cent of the business.

The matter is significant for the group, which had sales of $50 billion in 2016, as it could force the majority shareholder to raise hundreds of millions of dollars to purchase the shares, after a period of falling profits for Louis Dreyfus and other traders of agricultural goods (all figures US$).

The minority shareholders asked in September 2015 to sell 16.6 per cent of Louis Dreyfus Holding B.V., under a long-term agreement giving them an option to sell shares to Russian-born Margarita Louis-Dreyfus. However, the parties have disagreed over the valuation of the stake.

Louis Dreyfus Holding lost a court case in Amsterdam seeking to block the appointment of an arbitration expert at the International Chamber of Commerce.

An appeal by Louis Dreyfus against that decision had been due to be heard last Friday but was cancelled, a court official said.

“Louis Dreyfus has withdrawn the case and an expert has been appointed (for arbitration),” said a source speaking on condition of anonymity because the agreement is confidential. “The case is finished.”

Louis Dreyfus Holding agreed to pay legal fees to cover the court proceedings, the source said.

All shareholders either declined comment or could not be reached for comment. The lawyers representing the parties and the International Chamber of Commerce, which will oversee the arbitration proceedings, declined to comment.

Valuation

The terms of the put option held by the minority shareholders states that they should receive the highest of either the equity value of the shares based on the holding firm’s latest financial report, or fair market value determined by an expert.

Louis Dreyfus Holding’s most recent annual report indicates total equity of $4.92 billion, which would value a 16.6 per cent stake at about $817 million.

The Louis Dreyfus commodities trading group in 2016 reported a second year of lower core profits but said it expected restructuring to help its results this year.

Margarita Louis-Dreyfus married Robert Louis-Dreyfus in 1992 and the couple had three sons. She took over as chairman of the company, founded in eastern France in 1851, after he died of leukaemia.

— Reporting for Reuters by Anthony Deutsch and Gus Trompiz; additional reporting by Christine Prentice in New York.

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The offer of 40 euros per share is a premium of 42 per cent to the stock’s closing price on Friday and is conditional on SHV acquiring all Nutreco shares. It could also be terminated if a third party were to bid eight per cent or more above the offer price.

Nutreco, which is based at Amersfoort and had 2013 sales of 5.2 billion euros, said it received guarantees from SHV that it would continue its growth strategy, including acquisitions, and that it would keep its headquarters in the Netherlands.

“SHV will be an excellent partner, enabling us to maintain our corporate identity, culture, values and organization,” said Knut Nesse, CEO of Nutreco.

Nutreco has operated in Canada in 2007, when it bought feed companies Shur-Gain and Landmark Feeds from Maple Leaf Foods to create a Canadian business group dubbed Nutreco Canada, headquartered in Guelph.

Shur-Gain, founded in 1937 as part of Canada Packers, was taken over by Maple Leaf Mills in its merger with Canada Packers in 1990. Landmark Feeds, set up in 1954, was bought up by Maple Leaf Foods in 1999.

The two companies, between them, run livestock feed and pet food plants in Quebec, Ontario, Manitoba, Alberta, New Brunswick, Prince Edward Island and New York state, and operate 13 retail outlets in Atlantic Canada.

Under the terms of the agreement, SHV, which has its roots in a 19th century coal trading company, will pay for the acquisition in cash from its own financial resources.

Explaining the deal, SHV said that Nutreco, which makes livestock, chicken and fish feed, had strong management and good growth prospects in emerging markets.

By the close of trading on Monday, SHV said it had purchased more than five per cent of Nutreco’s outstanding shares, which rose 39.5 per cent in Amsterdam to just below the offer price.

SHV currently operates in sectors including cash-and-carry wholesale with the Makro brand, energy distribution, transport and industrial services. It is active in 50 countries and employs approximately 47,000 people.

The offer for Nutreco, which employs 10,000 people in 30 countries, is expected to open in the final quarter of 2014 and Nutreco’s executive and supervisory boards recommended shareholders accept it, the companies said in a statement. It is subject to regulatory approval.

“It is important for SHV that it ultimately acquires the entire outstanding share capital of Nutreco,” a statement said.

“If SHV acquires 95 per cent of the outstanding shares of Nutreco, Nutreco intends to delist from Euronext Amsterdam expeditiously.”

If Nutreco were to terminate the acquisition and pursue a rival deal it would pay a one-off fee of 25 million euros.

ING Corporate Finance is acting as financial adviser to Nutreco. Leonardo & Co. is acting as independent financial adviser to the Supervisory Board of Nutreco. De Brauw Blackstone Westbroek is acting as legal adviser to Nutreco.

Lazard is acting as sole financial adviser to SHV. Allen & Overy LLP is acting as legal adviser to SHV. Bain & Company is acting as strategy adviser to SHV. Deloitte is acting as tax and financial due diligence adviser to SHV.

— Anthony Deutsch is Reuters’ Netherlands bureau chief, based in Amsterdam. Includes files from AGCanada.com Network staff.

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In France, wholesalers and officials traded grievances, while more products were removed from sale in Britain, Germany, Austria and Norway; police raided factories in several countries and Dutch prosecutors accused one meat supplier there of fraud.

No one is reported to have fallen ill from eating horse in the month since it was first identified in Irish beef burgers, but evidence of widespread mislabelling and revelations of a complex market in which produce crisscrosses the EU trading bloc have damaged Europeans’ confidence in the food on their plate.

Governments have come under pressure to act and to explain lapses in quality control, while supermarkets, fast-food chains and ready-meal manufacturers are battling to save reputations, some fighting for their very survival amid a welter of lurid headlines playing on a popular queasiness about eating horses.

A French meat company with a famous name accused by the government in Paris of knowingly passing off horsemeat as beef hit back angrily on Friday, accusing ministers of jumping to a hasty conclusion, as its workers feared for their livelihoods.

"This verdict arrived at by the ministers… has condemned 300 families to death," said the Spanghero company’s marketing director Christophe Giry, referring to its 300 employees.

"We’re being used as scapegoats for politicians and everybody," he added. "They needed to find a head."

"The government has been too hasty," said company boss Barthelemy Aguerre, a day after ministers said it could not have failed to realize cheap meat from Romania was horse, not beef.

"I think we will prove our innocence," he added.

Consumer Affairs Minister Benoit Hamon said: "At the very least there was a lot of negligence… Millions of consumers have been duped, so we had to act quickly."

At Spanghero’s factory — a red and white corrugated-iron-clad building in Castelnaudary, a town famed for its cuisine near the southern city of Toulouse — workers were throwing carcasses, sausages and burgers into a dumper truck on Friday.

The Spanghero family, a dynasty of French rugby players who founded the firm but sold it in 2009, bemoaned the loss of their good name: "We have been plunged into dishonour," said Laurent Spanghero, whose brother once captained the national rugby team.

The Romanian government and abattoirs that routinely slaughter horses have said their exports were properly labelled.

Dutch raid

Dutch prosecutors launched a criminal investigation into an as yet unnamed company believed to have been falsely labelling beef mixed with horsemeat after searching a plant in the south.

They said it was "suspected of forgery, fraud and money laundering" and added: "It is believed the company processed horse carcasses from Ireland and mixed them with beef."

In a separate development, a Dutch businessman who was convicted last year of selling falsely labelled horsemeat, denied suggestions of involvement in the latest scandal.

After a senior Romanian food safety official identified Jan Fasen’s company Draap Trading as a buyer of horse meat from Romania, a lawyer for Fasen, who is based in Breda in the southern Netherlands, said in a statement he denied all allegations, including of being a key figure in a fraud network.

He noted that Fasen was appealing against last year’s conviction, which court documents show involved the sale of beef mixed with horse to two French companies.

Governments have highlighted that horsemeat poses little or no health risk — though some carcasses have been found tainted with a painkiller given to racehorses but banned for human consumption — and have said retailers are ultimately responsible for ensuring the products they sell are what they claim to be.

One supermarket chain, Kaiser’s Tengelmann in Germany, said it plans to sue Comigel, a French supplier of frozen beef lasagne and other ready meals, for selling it horsemeat: "We feel cheated and deceived," Tengelmann boss Raimund Luig said.

"We will definitely file for damages."

German discount supermarket chain Lidl said it had taken beef tortelloni off its shelves after Austrian health authorities said they found horsemeat in one sample made by Liechtenstein-based Hilcona. The latter blamed its supplier.

Compass Group, the world’s biggest caterer, and Whitbread, Britain’s biggest hotel group, added to the list of firms withdrawing beef products found to contain horse.

Damage control

Also in Britain, leading chain Tesco, one of the earliest casualties of horse-tainted beef burgers, highlighted a different approach to defending its reputation, telling customers they would be able to track the implementation of systems it is putting in place to ensure the origins of its food are clear.

British supermarket bosses signed an open letter to consumers telling them they "share their anger and outrage" at finding food safety "compromised by fraudulent activity or even, as alleged, an international criminal conspiracy."

That move came after Prime Minister David Cameron, himself under pressure from voters, appeared to chide the retailers.

Britain’s Food Standards Agency, set up in 2001 after the BSE scandal saw British beef banned by European neighbours, said on Friday that of 2,501 tests for horse DNA in samples of beef products from shops, 29 had shown traces above one per cent.

Authorities in the northwestern English county of Lancashire said they were recalling pies from 47 local school kitchens after they provisionally tested positive for traces of horse DNA. "This does not appear to be a food safety issue, but I’ve no doubt parents will agree we need to take a very firm line with suppliers," County Councillor Susie Charles said in a statement.

EU governments approved an EU-wide programme of DNA tests on beef products to assess the scale of a food scandal involving mislabelled horsemeat, the bloc’s executive said on Friday.

The initial one-month testing plan will also check horsemeat for potentially harmful drug residues, after six horses slaughtered in Britain tested positive for the anti-inflammatory phenylbutazone, which is illegal in meat for human consumption.

The British government and the European Union have called for a high-level meeting to investigate the scandal, and it will be on the agenda of a Feb. 25 EU farm ministers’ meeting.

— Jean Decotte and Anthony Deutsch are Reuters correspondents based in Toulouse and Amsterdam respectively.

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