Louis Dreyfus Said to Face Resistance in Minority Stake Sale

(Bloomberg) -- Margarita Louis-Dreyfus is struggling to sell a stake in her eponymous crop-trading empire because of her reluctance to give up control and lukewarm interest from suitors, according to people familiar with the matter.

Louis Dreyfus Co.’s long-time adviser Credit Suisse Group AG hasn’t found an investor after holding talks with private equity firms, sovereign wealth funds and rival trading houses, said the people, who asked not to be identified because talks are private. Most suitors aren’t interested in just a minority stake or have balked at valuation expectations, they said.

Spokeswomen for Louis Dreyfus and Credit Suisse declined to comment.

Credit Suisse has its own incentive to help Margarita Louis-Dreyfus find an investor. The bank lent $1 billion to the billionaire to help her buy out family members and, as backing for the loan, she pledged her controlling stake.

Still, it’s been difficult to attract an investor at a time when the finances at the company are deteriorating under the strain of falling profits and weak agriculture markets.

While certain parties have expressed interest, some private equity firms and sovereign wealth funds signaled concerns about the value of a minority stake, said two of the people. The trading houses have questioned the logic of buying into a rival without gaining control, they said.

Cofco International Ltd., the global trading arm of China’s biggest food company, was among those approached by Credit Suisse, said one of the people. A Cofco International spokesman in Geneva declined to comment.

In an interview in May last year, Louis Dreyfus Chief Executive Officer Ian McIntosh said that the firm was talking to regional partners in Asia and emerging markets about a potential equity investment. At the time, people familiar with the matter said the company had held early-stage talks with several trading houses in Asia with a global presence.

The equity value of Louis Dreyfus Holding BV, which owns LDC as well as struggling Brazilian sugar processor Biosev SA, fell to $4.1 billion at the end of 2018 from $4.9 billion the year before, according to filings. Margarita Louis-Dreyfus owns 96% of the holding company.

Louis Dreyfus represents the ‘D’ in the quartet of the world’s biggest agricultural traders known as the ‘ABCDs’. Archer-Daniels-Midland Co., Bunge Ltd. and Cargill Inc. are the other members.

Margarita Louis-Dreyfus’s late husband Robert Louis-Dreyfus, who died in 2009, was the great grandson of Leopold Louis-Dreyfus who founded the company in 1851.

--With assistance from Patrick Winters.

To contact the reporters on this story: Andy Hoffman in Geneva at ahoffman31@bloomberg.net;Jan-Henrik Förster in London at jforster20@bloomberg.net;Dinesh Nair in London at dnair5@bloomberg.net

To contact the editors responsible for this story: James Herron at jherron9@bloomberg.net, Lynn Thomasson, Dylan Griffiths

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