Australian dairy co-op Murray Goulburn has joined the bidding war for Warrnambool Cheese and Butter Factory with the highest bid yet.
The company this morning (18 October) issued an off-market takeover offer for $7.50 cash per share for WCB. This is higher than Bega’s offer valued at between A$5.77 and A$6.08 per share made last month and, more recently, Saputo’s proposed offer of A$7 per share.
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A successful bid by Murray Goulburn, which holds a stake of over 17% in Warrnambool, would create one of the largest Australian owned food and beverage businesses and a globally competitive dairy food company 100% controlled by dairy farmers.
In a statement to the Australian Securities Exchange, the dairy group said the proposed merger would place the combined business among the top 20 global dairy producers, with forecast annual revenues of over A$3.2 bn and a milk supply of over 4bn litres in fiscal 2014.
The company said it has secured funding for the deal and pointed out that its offer is higher than both rival bids from Saputo and Bega. The offer also tops an independent expert’s assessed value range for WCB.
Murray Goulburn MD, Gary Helou, said such a deal would be “in the best interests of WCB shareholders” given the “compelling strategic benefits” that would be delivered to farmers, the dairy industry and local communities.
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By GlobalData“We believe the formation of an Australian co-operative controlled by both Murray Goulburn and WCB suppliers provides significant benefits to all stakeholders, keeping profits onshore, maximising total farm gate returns to farmer shareholders and increasing the capacity for significant investment in the domestic dairy sector and individual communities.
“We believe our proposal is both competitive and financially compelling to WCB shareholders. However, we also ask WCB shareholders to carefully consider the full picture. Namely, in addition to crystallising the value of their shares at an attractive price, they have the opportunity to contribute to the formation of a globally competitive Australian dairy food company that will act forthrightly and decisively in the interests of its suppliers and their communities.”
The offer is conditional on approval from the Australian Competition and Consumer Commission.
Click here to view the full announcement.
