Associated British Foods said today [Friday] it would buy out the 18.75% stake in Australian bakery unit George Weston Foods that it does not already own, by offering A$6.60 (US$3.7) per share.

George Weston brands include Top-Top bread and Wagon Wheels biscuits, leading brands in Australia.

If the plan goes ahead, ABF will pay a capital return of A$4.95 per share and a fully franked special dividend of A$1.65 a share. ABF said the payment represented a 28% premium to the A$5.14 at which Weston shares closed on 17 May, when speculation about such a buyout first broke.

However, some shareholders in Weston are quoted by Reuters as saying they feel the bid is insultingly low. "We think it's a disgrace, and we'll be looking at it closely," said Simon Conn, portfolio manager at Investors Mutual, which Conn said owns "several" percent of Weston.

Other shareholders said cash-rich ABF was being opportunistic by lodging a bid before Weston's operational improvements flow through to earnings and drive the food group's share price up.