Aabar buying stake in poultry operator

Aabar Investments, the Abu Dhabi investment vehicle with an interest in Virgin Galactic, has struck a more earthly deal buying a stake in a Turkish poultry producer.

Aabar holds a stake in Virgin Galactic.

Aabar Investments of Abu Dhabi is not just interested in glamorous companies such as Glencore, Virgin Galactic and Daimler.

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Yesterday, it signed a preliminary agreement to buy 16.3 million shares in the Turkish poultry producer Banvit Bandirma Vitaminli Yem Sanayii.The Istanbul-listed company said its shareholder Valid Faruk Ebubekirwas selling the shares to Aabar.

The shares are to be sold at 4.8 Turkish lira each after certain conditions in the agreement are met, Banvit said in a statement to the Istanbul Stock Exchange after the market closed on Friday.

For the company, Turkey's largest poultry producer, Aabar is an important investor.

In May, Aabar, which is owned by the International Petroleum Investment Company, became the largest "cornerstone investor" in the commodity trading giant Glencore.

Large investors such as Aabar are given priority over small investors in initial public offerings but usually have to agree to buy shares at the top of the price range.

Aabar invested US$1 billion in Glencore's flotation. Having a big player such as Aabar behind it bodes well for the Turkish company. On the Istanbul exchange, shares in Banvit climbed 4.3 per cent yesterday to 4.59 lira, the highest level in almost a month.

Gokhan Canitez, an analyst who covers the stock at Tera Stock Brokers in Istanbul, said the sale of the shares had been a lengthy process, taking several months and dragging Banvit's stock price down.

"Now we have confirmation and it has been complete, it is lifting pressure off the stock price," said Mr Canitez.

He has a neutral rating on the stock and a target price of 6.30 lira a share. The valuation of the stake sale was close to his forecast of 4.5 liras per share, added Mr Canitez.

Turkey's economic and political environment is encouraging Banvit's success. The government has increased the tax for companies importing meat, from 60 per cent to 75 per cent, curbing demand for meat imports but focusing attention on local producers, notably Banvit.

"We've been expecting this since the third quarter of last year, but it is one of the main points of good news for the company," he said.