SINGAPORE/AUS: Wilmar to persevere after Goodman Fielder rejection
Wilmar believes offer for Goodman Fielder was "compelling"
Singapore agribusiness giant Wilmar International has said it will try to hold talks with the Goodman Fielder board about its interest in buying the business after the Australian food manufacturer brushed off a A$1.27bn bid.
Goodman Fielder yesterday (28 April) labelled the offer from Wilmar and Hong Kong investment firm First Pacific "opportunistic" and said it "under-valued" the company.
However, Wilmar insisted the bid was "compelling" and said it represented a "premium" of 27% above the volume-weighted average price of Goodman Fielder's shares since the Meadow Lea butter owner's profit warning on 2 April.
Wilmar, which owns 10.1% of Goodman Fielder, had sought access to the group's books and said it would continue to do so.
"First Pacific and Wilmar note the announcement by the Goodman Fielder Board and will continue to seek engagement with the board about entering into due diligence aimed at bringing forward a binding proposal to Goodman Fielder shareholders," Wilmar said.
Wilmar and First Pacific have drawn up plans to establish a joint venture to buy Goodman Fielder. The partners would each own 50% of the venture.
Wilmar insists a takeover of Goodman Fielder would give it an opportunity to "create a leading Asia-Pacific agricultural and consumer staples company".
Earlier this month, shares in Goodman Fielder plunged more than 20% after it announced it would not meet its profit expectations for the 2014 financial year.
Goodman Fielder has had a challenging few years with profits and sales under pressure. It said it "remains focused on maximising shareholder value".
It is looking to cut jobs to help lower costs by A$25m. The company also said it was reviewing the options for its dairy business in New Zealand and started to look at ways to "optimise" its daily deliveries of fresh bread.
After two years of losses, Goodman Fielder returned to the black in its last financial year, which ran to the end of June 2013.
Nevertheless, underlying EBIT from continuing operations fell more than 8% during the year. Revenue from continuing operations fell 3.9% to A$2.13bn thanks to lower sales volumes from Goodman Fielder's bakery and grocery products.
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