Shares in European food ingredient groups rose sharply on Monday as U.S. giant DuPont agreed a $5.8 billion takeover of Danisco after coming up with the best bid for the Danish food company.

With few potential suitors seen having the financial muscle to outbid the U.S chemical group, attention switched to Danisco's rivals whose shares jumped to reflect the generous bid level and further possible takeover activity, analysts said.

Shares in Danish ingredient rivals such as Novozymes and Chr Hansen Holding rose strongly, together with Britain's Tate & Lyle and DSM of the Netherlands.
"The bid shows how valuable these food ingredient companies are with the bid multiple being similar to the value that Reckitt Benckiser shares trade on currently," said Investec Securities analyst Martin Deboo in London.

Danisco stock rose to a high of 670.50 crowns, above DuPont's 665 crown-a-share cash bid, but by 1 p.m. GMT were at 660.5 crowns, some 24.5% above Friday's close, suggesting a higher bid for the group was unlikely after DuPont announced its agreed bid for Danisco on Sunday.

"We do not expect that the bid from DuPont will be topped by others," Jyske Bank analyst Jens Thomens said in a note.

Danisco's Chairman Jorgen Tandrup said he would be surprised if a counter bidder emerged to rival DuPont's agreed bid, and did not expect any anti-trust problems with the acquisition.

"There has been a process where several contenders have been involved, and in the final round here there was still competition for the company, and last night we had the winner," said Tandrup, declining to name any other of the contenders.

Analysts said Du Pont was attracted by Danisco's mix of food ingredients such as emulsifiers, gums and natural sweeteners and its industrial enzymes which are used in areas such as for advanced bioethanol fuels.

These are fast-growing areas amid a surge in global food and fuel prices, and is where Danisco had focused its business after selling off its sugar business in 2009, they added.

The cash deal would enable DuPont to enter a niche in the chemical industry - food additives -long dominated by smaller rival International Flavors and Fragrances Inc. It would also solidify existing cooperation between the two companies in the field of technology for advanced bioethanol.

Analysts said the bid valued Danisco at around 11 times its earnings before interest, depreciation and amortization (EBITDA), which was around where the highly rated consumer goods company Reckitt Benckiser currently traded.

Among Danisco's rivals, Novozymes, majority owned by the foundation that also controls drugmaker Novo Nordisk, leapt to a record 807 crowns and stood 2.9% higher at 795.5 crowns a share. Private equity backed Chr Hansen, which listed in Copenhagen last year, advanced 4.1% to 121.2 crowns, after an earlier high of 126 crowns. Tate & Lyle shares were up 0.5% at 540.5 pence.

Analysts said after it sold its sugar processing business last year, the British sweeteners and starches group could become a target for agribusiness giant Bunge.