Gilinskis’ Hostile Takeover Bid Shakes Up Colombia’s Business Landscape

A look at five changes ushered in by the hostile takeover of Nutresa and Sura by the Gilinski brothers

The deal sent shockwaves through the local stock market
March 02, 2022 | 01:00 AM

Bogotá — The takeover bids by the powerful Colombian Gilinski brothers for two companies belonging to Grupo Empresarial Antioqueño (GEA), Nutresa (NUTRESA) and Sura (GRUPOSUR), sent shockwaves through the Colombian Stock Exchange (BVC), and will cause changes that will likely be long term in the Colombian business community following the closing of the bid on Monday.

After the closing of the second takeover bid for Grupo Sura on Monday afternoon, the Gilinskis remained the largest shareholder, with 31.5%, while the second largest is Grupo Argos, with 27.7%.

However, the second takeover bid for Grupo Nutresa concluded without meeting the minimum target set by the Gilinski family, whose fortune was minted in the banking sector.

Read More: Jaime Gilinski Faces Moment of Truth as Colombia Bids End


Following the conclusion of the second period for receiving offers, the Gilinskis barely managed to increase their share of participation in Nutresa by 3.11%, with their aim having been increasing it by at least 18%.

Once the bankers Jaime and Gabriel Gilinski release the minimums of the bid and buy the shares that would be sold to them in the second bid, their participation in Nutresa will increase from 27.69% to 30.8%.

As one of the three largest deals of the year in Colombia in 2021, according to firms that track the M&A market, generated a shake-up in the local stock market, little accustomed to such movements in recent years, as well as the Colombian business landscape.


José Luis Suárez, managing partner of Gómez Pinzón Abogados, which provided legal advice on the transaction, told Bloomberg Línea that the key “was to have trusted and believed in the institutional framework and regulation of the stock market. These transactions were an endorsement of the market’s institutional robustness, thus demonstrating that if things are done well, they work by applying the regulations that exist”.

The following are five changes that could be on the horizon for the country’s business community after the historic move:

1. Companies Will Be More Alert

After the calm in the local market was interrupted, some analysts agree that companies listed or planning to list in the market may now desist in order not to be subject to hostile takeover bids.

At the same time, the whole affair also represents a wake-up call for all listed companies, in a scenario in which many of their shares are undervalued.

2. A New Kind of Leadership

Felipe Campos, chief economist at Alianza Valores, told Bloomberg Línea that after a period of stagnation in emerging stock markets in general, company managers must understand the environment and recognize that if there are incentives, they cannot be only long-term for investors.

“You have to work on dividend policies that are a little more attractive, trying to balance the long-term health of the company, which is fine, but also the need for investors to have some return,” he said.

According to the analyst, GEA “has sacrificed the dividend issue in favor of the company’s growth”, and he therefore believes that in the future this should be rethought to generate create balance.


3. A Focus on Minority Investors

If the recent takeover bids demonstrated anything, it is that the voice of minority shareholders must be heard, and that their satisfaction is key, since it is not only a matter of “seeking them out at times when they need resources, but also repaying them for their trust”, Daniel Escobar, chief economist at Global Trading Indicators Advisors, told Bloomberg Linea.

Economic analyst Gregorio Gandini agrees, and who told Bloomberg Línea that “minority shareholders are a determining force that must be taken into account”, because together they can define the control of companies.

4. Undervalued Shares and More Takeover Bids

According to Gandini, “the low levels of liquidity and the price of shares are scenarios that can provide opportunities for actions such as those seen in takeover bids”.

He believes that, after such takeovers, “the local stock market has a greater scope” than before, and therefore “it can be the scenario for more moves of this type”.


Escobar, for his part, said that “it is true that a company cannot avoid market volatility, but it can open the doors for more fluid communication. We had been ostracized from investments for several years, in which the profitability did not compensate the risk”.

He insisted that “it is also a warning that there is still a lot of value that is not being reflected in share prices, which generates the expectation of more similar moves in the future”.


5. New Security Mechanisms

After the hostile takeover bids, it is also worth analyzing the protection that companies have to face such challenges, after the ‘game of chess’ the Gilinski family set up to win space within the companies that are GEA’s crown jewels, and which for a long time was considered to be protected from such a bid.

Felipe Campos commented that in the case of GEA, in some way the same cross-shareholding structure could have been attractive for the new partners, because after having entered, “an expanded effect” was generated.

“So basically in these changes there is an implicit leverage in which one manages to buy something, and ends up owning many other things,” Campos said.


With the dynamics imposed by the Gilinskis with their bids, it became clear that cross-shareholding schemes are not a totally effective shield, and that they lost their attractiveness in the current scenario.

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