Flora - comment

KKR is working with bankers to explore a potential sale of Flora Food Group, the spreads business it acquired from Unilever, with the Financial Times reporting a potential valuation of around $10bn. While the subordinated bonds have portability and would not trigger a change of control, they would still likely trade up under new equity ownership.  However, we see the headline valuation as optimistic, with fair value closer to €7–7.5bn ($8.2–8.8bn), and a more realistic exit potentially involving a break-up, starting with a sale of the underperforming Americas business.