New Zealand dairy processor A2 Milk Co. has turned down takeover interest from Freedom Foods Group and the Australian group's bid partner, Dean Foods, the US dairy giant.
A2 Milk said today (20 July) its board did "not consider that the proposal in the expression of interest is compelling" and added: "Accordingly the board would not be in a position to recommend it to shareholders."
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Last month, Freedom Foods, already a shareholder in A2 Milk, announced it and an "unnamed leading international liquid dairy milk company" had put forward "an indicative, non-binding and conditional expression of interest" in the business. Forty-eight hours later, A2 Milk named Dean Foods as the company teaming up with Freedom Foods.
A2 Milk said today it had received "other confidential enquiries indicating potential interest in the company" and is evaluating the interest.
"The board remains of the view that there is no certainty that any proposal will result in a transaction or offer capable of acceptance by the company or its shareholders, and that a takeover offer is not imminent," it added.
In a second announcement, A2 Milk raised its forecast for annual sales for the year to the end of June 2016 to NZ$267m (US$175.6m) from NZ$230m. The company pointed to "strong recent financial performance and further expected growth throughout FY16" stemming from "continued growth" in infant formula in Australia, New Zealand and China.
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By GlobalDataIt also predicts sales growth will come from the expansion of liquid milk in the USA and the launch of ice cream in August this year in Australia and New Zealand.
A2 Milk gave some unaudited numbers for the financial year just ended. It said its "underlying trading result for FY15 is ahead of plan" with revenue of NZ$154m, up 39% on the previous year.
A2 Milk is dual listed in New Zealand and Australia. It claims to account for 9% of the "total fresh milk grocery market" in Australia. It has also built operations in China, the UK and, most recently, the US, where it launched its milk this spring.
