September 28, 2017 / 4:43 PM / in 22 days

UPDATE 1-Autogrill paves way for alliances with group overhaul

(Adds analyst comment, details)

By Francesca Landini

MILAN, Sept 28 (Reuters) - Travel caterer Autogrill plans to separate its Italian motorways and airports restaurants into a wholly-owned subsidiary to make it easier to form alliances and joint ventures in its different businesses.

The Italian group said on Thursday that under the plan, expected to come into effect at the beginning of next year, the parent company would focus on strategy while subsidiaries in different geographies would manage day-to-day operations.

“The reorganization project will provide the group with more flexibility to better develop alliances/joint ventures in the different business areas,” it said in a statement.

Shares in the company extended gains to reach 11.22 euros, their highest since Sept. 1, following the news.

Once the restructuring is complete, “Autogrill might become more suitable for a deal in the industry ... this could provide room for diversification and synergies,” Kepler Cheuvreux analyst Marco Baccaglio said in a report.

The prospect of deals could lift the company’s valuation to 12-13 euros per share, Kepler Cheuvreux said, adding that otherwise the business was probably worth about 10 euros per share due to its exposure to a weakening U.S. dollar.

Though founded in Italy, Autogrill now makes about 70 percent of its operating profit from its U.S. subsidiary.

The group is controlled by the Benetton family and runs restaurants and bars at some of the world’s busiest airports and motorways.

Like-for-like sales rose 3.4 percent to 3 billion euros ($3.5 billion) in the first eight months of the year, it said, boosted by sales at airports.

$1 = 0.8482 euros Reporting by Francesca Landini; Editing by Mark Potter

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