Australia’s largest food company, Goodman Fielder, looks set to throw in the towel and accept a hostile takeover bid from compatriot yeast and ingredients group Burns Philp, although Goodman believes the bid undervalues it.

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Burns Philp has been trying to buy Goodman for many months, and has offered some A$2bn (US$1.2bn) to do so. However, Goodman has been holding out for a better offer, and had recently engaged in talks with other domestic and international parties.


However, Goodman today [Tuesday] admitted that all talks with alternative bidders had now ended without resolution.


This came as no surprise to many analysts, who felt Burns Philp had the strongest hand from the start.


“I guess the ball is pretty much in Burns Philp’s court now,” Dow Jones quotes Matt Williams as saying. Williams is portfolio manager at Perpetual Investments, one of Goodman Fielder’s largest shareholders, with an approximate 7.8% stake.

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Burns Philp recently extended its bid to 14 March, and is now hoping to secure 90% acceptance. The deal has been closely followed, not least because the buyer will be smaller than its target, in which it already holds a 21% stake.


Remaining gung-ho, Goodman Fielder chairman Keith Barton commented today that the absence of any adequate offer from other parties did not make the Burns Philp bid acceptable, adding that the company was still open to offers from rival bidders.


However, rival bidders prepared to outbid Burns Philp offer are thin on the ground, and analysts believe Burns Philp will now carry the day.


just-food.com recently published a feature titled All eyes on Burns Philp as Goodman Fielder takeover gets ugly. To visit it, members can click here.


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