Murray Goulburn has stood by its latest offer

Murray Goulburn has stood by its latest offer

Murray Goulburn has questioned the value of the latest offer put forward for fellow Australian dairy processor Warrnambool Cheese and Butter Factory by Canada's Saputo.

Earlier today (25 November), Saputo upped the stakes in the battle to buy WCB, with a pledge to increase its offer again if it secures over half of the Australian dairy firm.

Saputo, locked in a three-way tussle for WCB with Australian groups Bega Cheese and Murray Goulburn, said it will increase its bid to A$9.20 a share - should it attain more than 50% of the business.

The bid is an increase on the A$9-a-share offer Saputo tabled two weeks ago - just days after Murray Goulburn made its own bid, also worth A$9 a share.

Saputo had insisted its A$9-a-share offer was "superior" to Murray Goulburn's bid and it did the same today after annoucing its revised proposal.

However, Murray Goulburn questioned whether the bid was worth more to WCB investors - of which it is one, owning around 18% of the business.

Saputo's A$9.20-a-share bid will no longer include WCB's plans to pay special dividends to its shareholders. WCB, which has backed Saputo throughout the takeover battle, had planned to pay out the dividends if the Canadian company reached certain thresholds of ownership. The dividends would be deducted from the A$9 a share offer. WCB said it no longer intended to pay the dividends, a move Murray Goulburn said made the new bid worth less than Saputo's previous offer.

"Murray Goulburn believes that the amended terms represent a reduction in the implied value of Saputo's offer to certain WCB shareholders, given that the previously announced franking credit benefit of A$0.56 per share will no longer be available as a result of the removal of the special dividend component of Saputo's offer," the company said.

WCB reaffirmed its support for Saputo's bid and said each of its directors and executives planned to accept the offer in the absence of a "superior proposal".

The WCB board also "unanimously rejected" the Murray Goulburn offer, as well as that from a third bidder, Australian dairy firm Bega Cheese.

Saputo's offer closes on 13 December. Murray Goulburn said its Canadian rival had not declared its bid as final and could still extend the closing date of the offer. It added: "As such, we urge WCB shareholders not to rush their decision to sell their WCB shares. Murray Goulburn believes its own A$9.00 cash per share offer continues to represent compelling value for WCB shareholders, is simple and straightforward, and delivers an Australian-owned and operated company with the scale, capacity, strength and momentum to service global growth opportunities."

Murray Goulburn, which needs to secure the approval of Australian competition officials for its bid, will meet with WCB shareholders and suppliers tomorrow and Wednesday.