(Bloomberg) – In a span of four decades, Colombian Jaime Gilinski has quietly accumulated a fortune that exceeds US $ 4,000 million by expanding your family’s group of businesses and moving into new areas such as banking, finance, and real estate.
At 63, he’s embarking on his biggest gamble yet: an offer of US $ 2.2 billion to buy uA majority stake in the food manufacturer Grupo Nutresa SA with the royal family of Abu Dhabi. For the deal to be successful, it will have to convince a complex cross-stakeholder of investors known as Grupo Empresarial Antioqueño, or GEA, and multiple pension funds that the 38% premium is too attractive to pass up.
The offer to buy up to 62.6% of the Medellín-based company has put the usually reclusive Gilinski in the spotlight in his native Colombia and caused a commotion in local capital markets, typically lethargic, where large M&A transactions are unusual.
But the plan has been in the works for the past two years, he said in an exclusive interview from Miami, along with his son Gabriel, who is involved in family businesses. To maintain absolute discretion, he assembled a group of independent investment bankers and He used his own experience as an M&A banker at Morgan Stanley in the 1980s to prepare the offering.
“It’s not something that happened overnight,” Gilinski said. “I tend to be very, very focused on the details. I do a lot of research ”.
If he manages to convince shareholders to sell a majority stake in Nutresa, the move could be “the first of many investments” together with the royal family through its investment vehicle, Royal Group. As part of the deal, the Gilinskis would have a 50.1% stake in the total acquired in the food company and the royal family would have the remaining 49.9%.
“They have a great interest in growing in Colombia, in growing in Latin America, and we have decided to be long-term partners,” said Gilinski.
The joint project focuses on winning the offer of Nutresa and turn it into a global food business before targeting acquisitions.
“First we have to crawl and walk, then run,” he said.
After graduating from Harvard Business School, Gilinski returned to Colombia in the 1980s. Together with his father, who had a finance company, he bought the local branches of the international bank BCCI in 1991.
Three years later, the family, along with a group of more than 80 institutional investors, bought Banco de Colombia from the Government, which at that time was the largest bank in the country and became the largest privatization. They later sold the stake in the lender that is now Bancolombia SA.
In 2003, it bought Banco Sudameris and through other acquisitions it now operates as Banco GNB Sudameris with a presence also in Peru and Paraguay. In 2019, it acquired a stake in the British lender Metro Bank Plc.
His multibillion dollar empire also spans the media and real estate, including ownership of a news magazine in Bogotá, Four Seasons hotels in Colombia, and a massive real estate project on a former US Air Force base located near the Panama Canal. The family also has experience in the food industry after starting the Yupi snack company, which has a large presence in the region.
The profits raised from private equity investments in finance and banking that he has been making since the 1990s make up the majority of his $ 4.3 billion net worth, according to Bloomberg estimates.
Focus on the offer
For now, all eyes will be on Nutresa’s US $ 7.71 per share offering that will close on December 17. I know expects the shares to resume their trading on Monday in Colombia.
Key to the success of the operation will be the participation of the conglomerates Grupo de Inversiones Suramericana SA, or Sura, and Grupo Argos SA, which together hold 45.3%. Together with the pension company Protección SA, which manages pension funds and whose participation is 5.2%, and they are part of GEA.
The cross-holding structure of GEA companies is causing stocks to underperform and hurting liquidity in the local market, according to Gilinski. Nutresa shares have lost more than half their dollar value over the past decade, according to data compiled by Bloomberg.
The structure “has not allowed the market to really understand and add value to these assets because it really involves too much,” he said.
The size of the transaction not only shows confidence in Colombia, but also brings a major global investor to the Andean country, says Gilinski.
“I think we will be successful,” Gilinski said. And “it will be a great advance in the capital markets of Colombia to allow a change, which I think is necessary.”
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