Private equity again circling

Hopefully like many, I don't want a takeover of UMG, but for the business to remain majority Australian-owned by retail and institutional shareholders. I believe in the long term future of the business: today NSW and Victoria have fewer restrictions on hotel and other bars, as virus restrictions ease prior to Christmas. (The vast majority of UMG's business though is USA, Canada and UK not Oz).

However this is in 'Data Room' in 'The Australian' this morning (Monday 7 December 2020) by Bridget Carter, who often does a good job (although in the last few weeks, the listed QUB criticised a report she ran about its Moorebank logistics facility's proposed sale as 'inaccurate' and 'speculative):

GrainCorp spin-off United Malt Group is said to once again be in the crosshairs of private equity suitors, and this time it is believed to be The Carlyle Group that has been casting its eye over the operation.

Sources say the US-based buyout fund, with $US230bn ($310bn) worth of assets under management, has been circling the business in recent weeks. However, sources close to Carlyle say it is not currently pursuing United Malt, while the target declined to comment.

The news comes as Carlyle undertakes due diligence on Link Administration Holdings with Pacific Equity Partners for a joint acquisition of the $2.65bn listed company.

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Carlyle is also understood to have been looking at the $3.9bn Challenger Group this year, although it has not come forward as a bidder.

(and later on):

The shares were trading at more than $5 in April after it started trading as a separate company, but they fell below $4 in August, as many of its key markets suffered, with consumers drinking less beer as COVID-19 took hold in North America and Britain.

United Malt operates in three separate markets — North America, the UK and Australia — and the theory is that competitors would pay a higher price for each part of the business rather than the company as a whole.

The situation makes United Malt an attractive opportunity for buyout funds, which often break up a business and sell off the parts for a larger profit.

and also:

United Malt is among the four largest malt businesses in the world, with the others being Cargill, Malteurop and France’s Boortmalt, backed by Temasek out of Singapore.

Before it was part of GrainCorp, private equity firms Champ (now CPE Capital) and Castle Harlan owned the malt business. GrainCorp acquired it in 2009 for $757m.