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Billionaire Jaime Gilinski renews assault on Colombia

Banking billionaire Jaime Gilinski has renewed his assault on Colombia’s corporate establishment, significantly increasing his bids to win control of the country’s largest food company as well as its biggest holding group.

Shares in food group Nutresa were suspended on Tuesday after Gilinski announced his latest raid on Monday night, offering $10.48 per share for a further stake of up to 22.8 per cent.

Having acquired a 27.6 per cent interest with his first bid earlier this month, that would give him control of more than half the company. The latest offer price is nearly 36 per cent higher than Gilinski paid first time round and 25 per cent higher than Nutresa’s latest share price.

Gilinski, a Colombian who is based mostly outside the country, has also launched another bid to increase his stake in Grupo Sura, Colombia’s biggest holding group with interests in banking, insurance and pensions. Sura is also Nutresa’s largest shareholder.

The 64-year-old, who has built an empire of financial and property assets worth almost $4bn, bought just over 25 per cent of Sura earlier this month and is looking to acquire a further 6.25 per cent. His latest bid, launched on Friday, offers $9.88 per share — a 40 per cent premium to Sura’s current share price and 25 per cent more than the original offer.

Gilinski recently told the FT: “These are two companies which have not performed for shareholders over the last 10 years.”

The spate of four hostile bids within a few weeks has breathed new life into Colombia’s stock exchange. The shockwaves have also reverberated in Latin America given that corporate activism is relatively rare in the region, with family-controlled conglomerates often holding sway.

Analysts say the moves are part of a concerted attack on the “Grupo Empresarial Antioqueño” (GEA), a network of companies based in the country’s business capital Medellín and the surrounding department of Antioquia and linked to one another through a complex web of cross-shareholdings. The structure was devised in 1979 by Medellín executives to fend off predators from Bogotá.

The group also includes cement and construction conglomerate Grupo Argos, a key shareholder in both Sura and Nutresa. It has said it would not sell its stakes. Gilinski has denied planning a bid for Argos but this has not stopped speculation that his ultimate aim is to pounce on all three key members of the GEA family.

If his second bid is successful, Gilinski will overtake Argos as Sura’s biggest shareholder, giving him more leverage in how Sura votes on matters affecting Nutresa.

“The moves imply new expectations of possible inflows [to Colombia], as well as the possibility of other potential tender offers in the future,” analysts at Citi wrote in a note.

Fernando Quijano, director of Colombian financial newspaper La República, told the Financial Times that regardless of the outcome of the latest bids, Gilinski would have seats on the boards of both companies and would change the nature of the GEA for ever, making it “less Antioqueño”.

While shares in Nutresa were suspended on Tuesday, other GEA stocks rose in expectation of further bids. Gilinski’s business partner in the Nutresa bid is Abu Dhabi’s Royal Group.

Gilinski’s assets include a stake in the UK’s Metro Bank, as well as a large real estate development in Panama and Banco GNB Sudameris, which operates in Colombia, Peru and Paraguay.

Additional reporting by Michael Stott

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