A sale of Warrnambool Cheese and Butter Factory to Canadian dairy giant Saputo will help the Australian business grow, its senior management have claimed.
WCB chairman Terry Richardson said Saputo, which has tabled a takeover bid for the company, had indicated it would look to expand the group’s operations.
“Saputo does not have any activities in Australia and has advised WCB that it does not intend to rationalise or redeploy any of WCB’s fixed assets. In fact, Saputo has advised WCB that it would be looking to invest further to expand WCB’s operations bny increasing existing capacity or building additional capacity,” Richardson said yesterday (8 October) after Saputo’s A$392.7m bid was announced.
Saputo’s A$7-a-share cash offer trumps a bid made last month by another Australian dairy processor, Bega Cheese. Bega tabled a mix of cash and shares for WCB, which rejected the bid as “inadequate” and “highly opportunistic”. WCB’s board has backed Saputo’s offer.
WCB said the Saputo bid represented a 21.2% premium to the “implied value” of Bega’s offer, based on the price of Bega’s shares on 11 September, the day before the offer was made.
The company also claimed the Saputo bid gave WCB shareholders an 11.2% premium to the implied value of Bega’s offer based on Bega’s share price on Monday, the day before the Canadian firm’s bid was announced.
Richardson said: “As well as the premium offered to WCB shareholders, Saputo’s commitments to WCB suppliers, customers and employees were critical factors in the board’s decision to recommend Saputo’s offer, in the absence of a superior proposal.”