Linked In
News In
Linked In

You are viewing 1 of your 2 complimentary articles.

Register now to receive full access.

Already registered?

Login | Join us now

Saputo wins majority control of Warrnambool

Twitter Linkedin

Canadian dairy giant Saputo won majority control of Australia's oldest dairy processor after four months of a bitterly contested takeover battle, with acceptances to its bid creeping over 50%.

Saputo revealed that holders of a further 2.7m shares in Warrnambool Cheese and Butter Factory had tendered to its bid, lifting its stake from 47.9% to 52.7%.

The news comes four months after Australia's Bega Cheese kicked off the bidding war with a cash and shares offer worth initially Aus$5.78 a share, valuing Warrnambool Cheese and Butter Factory at some Aus$320m.

Saputo's bid, which won approval from the target company's board, is priced at Aus$9.00 a share in cash – a sum which rises to Aus$9.20 cash now that the 50% threshold has been reached.

Should Saputo go on to win a stake of more than 75%, the bid will rise to Aus$9.40 a share, with a maximum Aus$9.60 a share on offer should Saputo win acceptances from holders of more than 90% of Warrnambool stock.

At that price, Saputo's offer would value Warrnambool's equity at about Aus$540m.

The crossing of the 50% threshold also triggers an extension to February 4, from January 22, in the closing period for accepting the bid.

Rival suitor's comment

The statement also appears to dash the last chance for Murray Goulburn, Australia's top dairy exporter, to win control of Warrnambool, for which it has bid Aus$9.50 a share, but whose offer became ensnared in anti-trust concerns.

Advisers to Murray Goulburn - which failed four years ago to succeed in a Warrnambool bid despite raising its offer three times to eventually Aus$4.35 a share - have raised the possibility for the co-operative to remain a minority investor.

The co-operative said on Wednesday that "given Saputo's offer period is automatically extended for a further 14 days, Murray Goulburn will now commercially assess this development, including in relation to MG's 17.7% shareholding in Warrnambool".

Bega sells out

Bega Cheese on Thursday gave up its last hopes of takeover success, selling its 18.8% stake in Warrnambool to Saputo – for a pre-tax profit of up to Aus$68.2m at the maximum Aus$9.60-a-share offer price.

Bega said that its board was "conscious of the significant value of the Warrnambool shareholding, and its obligation to shareholders to continue to make sensible investment and capital management decisions".

The sale of the stake "is a better financial outcome for Bega Cheese and its shareholders than a successful takeover at the current bid value".

Bega shares closed on Wednesday in Sydney at Aus$4.80 - some 50% above their level before it made its bid for Warrnambool, a reflection of the capital gains but also including some uplift to account for the potential for the group to become a takeover target as well.

Warrnambool shares closed up 1.2% at Aus$9.42, more than double their price before Bega opened the takeover battle.


Twitter Linkedin
Related Stories

When teats are less controversial than Tweets

Russia’s government, while accused of spreading of fake news, is termed the real deal in farm support

Chinese milk output rebound to 'constrain' dairy imports in 2018

"A domestic production increase will constrain imports, ending a multi-year trend of import growth," US officials say

Can GlobalDairyTrade auction slow 'autumn free fall' in butter prices?

And can it help revive EU skim milk prices, at their lowest on data going back to 2001? One signal is not promising...

UN flags growing industrial use of cereals, as it trims world grain stocks forecast

Still, the UN FAO sees world grain stocks hitting a record high, and foresees "stiff competition" among exporters
Home | About | RSS | Commodities | Companies | Markets | Legal disclaimer | Privacy policy | Contact

© 2017 and Agrimoney are trademarks of Agrimoney Ltd
Agrimoney is part of the Briefing Media group
Agrimoney Ltd is registered in England & Wales. Registered number: 09239069