Oct. 28 (Bloomberg) -- Genus Plc, the biggest U.K. cattle breeder, will buy Sygen International Plc for about 187 million pounds ($333.4 million) to cut costs and gain genetic and bio- technology for boosting the meat quality of cows, pigs and chickens.
Shareholders of Abingdon, England-based Sygen will receive 63.2 pence a share in cash and a 0.8 pence dividend, Cheshire, England-based Genus said today. It will sell 55 million pounds of new shares to help fund the transaction.
Sygen's technology is used to enhance meat quality and boost efficiency in the production of meat animals, in particular pigs. Genus Chief Executive Richard Wood, 60, said he wants to apply it ``across all animal species'' as the company seeks to diversify beyond sales of frozen beef and dairy semen in about 70 nations.
Sygen shares rose 5.1 percent to 61.75 pence, valuing the company at 181 million pounds. Genus shares declined 3.2 percent to 347.5 pence, giving it a market value of 132.8 million pounds.
The offer price is about 55 percent more the average price of Sygen shares in the year ended Oct. 11, which was the last business day before it said it had received a takeover approach, Genus said. It's 37 percent more than the closing price of 46.75 pence a share on Oct. 11, Genus said.
Cost savings are ``eminently deliverable,'' said Workman. Reductions in head office expenses will be more immediate than for information technology and research and development, he said.
Earnings before interest and tax now may reach 30 million pounds a year, Workman said. Until now, they have been about 10 million pounds a year at each company, he said.
``There isn't really anybody else that compares with this,'' said Workman. Large competitors in Europe tend to be cooperatives that don't conduct significant research and development and don't have long-range strategies, he said.
Genus has developed a ``sex semen'' that lets buyers select the sex of the unborn calf, Wood said. This is useful with dairy farmers who want to breed milk-producing females, he said.
The company uses ``natural'' methods of research and development to introduce new genes into the species. Genus doesn't believe in genetically modifying cattle, according to Wood. ``We haven't gone down that way and we don't believe the industry will ever go in that direction,'' he said.
Genus will sell 16,923,080 new shares at 325 pence a share to fund the purchase. Barclays Plc will also loan the company about 180 million pounds, Genus said in the statement.
This is cache, read story here
