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Zooplus cuts profit target as investors approve takeover

·2-min read

By Zuzanna Szymanska

BERLIN (Reuters) -German online pet supplies retailer Zooplus slashed its 2021 core profit target by half on Thursday, blaming takeover transaction costs as private equity firms Hellman & Friedman (H&F) and EQT gained investor approval to buy the company for 3.7 billion euros ($4.3 billion).

Zooplus said its full-year earnings before interest, taxes, depreciation and amortisation (EBITDA) will come in at 20 million-35 million euros, compared to its previous guidance for a range of 40-80 million euros.

"As a consequence of the anticipated consummation of the takeover offer, the company will incur one-off transaction costs in a double-digit million euro amount, which will impact the company's earnings for the financial year 2021," the company said in a statement.

Zooplus' target for 2021 sales of 2.04 billion-2.14 billion euros remains unchanged, the supplier of pet food brands such as Eukanuba, Pedigree and Royal Canin said in a statement.

H&F and EQT are set to announce the number of shares accepted in the first round of a shareholder tender of Zooplus shares on Nov. 8.

Zooplus shares were up 1.4% at 479.80 euros by 1020 GMT on news the deal had been approved. That compares with a share price of 278.2 euros on the day before Hellman launched its first offer in August.

The bidders are offering 480 euros per Zooplus share as they look to tap into a market that has boomed during the pandemic with more people buying cats and dogs during lockdowns. They said on Thursday they had exceeded the minimum shareholder acceptance threshold required for the deal.

On Tuesday, Zooplus urged its shareholders to hurry to accept the takeover offer from the two companies, which had initially fought a bidding war but then teamed up to buy the retailer.

Shareholders in Zooplus who have not tendered their shares can still accept the takeover offer during an additional acceptance period from Nov. 9 to Nov. 22, H&F and EQT said.

The companies added that they would announce the final number of tendered shares after the additional acceptance period.

($1 = 0.8660 euros)

(Reporting by Zuzanna Szymanska, Editing by Miranda Murray, Emelia Sithole-Matarise and Susan Fenton)

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