Canadian dairy giant Saputo has increased its offer for Warrnambool Cheese and Butter Factory after being outbid by Australian dairy co-op Murray Goulburn.
Saputo yesterday (25 October) increased its all-cash offer for WCB to A$8.00 per share from its previous bid of A$7. The firm tabled its offer earlier this month, a bid that was “unanimously recommended” by the board of WCB.
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Last week, however, Saputo was trumped by Murray Goulburn, which issued an off-market takeover offer for A$7.50 cash per share. That was also higher than a cash-and-shares offer from another Australian dairy processor Bega Cheese.
Murray Goulburn and Bega Cheese are both shareholders in WCB. Murray Goulburn holds a 17% stake in the business, with Bega Cheese owning 18% of the business.
The WCB board yesterday put forward a “unanimous recommendation” that shareholders accept the offer by Saputo in the absence of a superior proposal.
The Canadian company, which has been looking to enter Australia for around a decade, said its offer is “superior” to all other proposals, at a 7% premium to Murray Goulburn’s bid and a 20% premium to Bega’s offer.
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By GlobalDataHowever, it added: “There can be no assurance that the offer will be successful, either in whole or in part, as Warrnambool is also the subject of other non-solicited takeover offers or proposals,” Saputo said.
In a statement in response to the revised bid, Murray Goulburn said it remained “committed” to acquiring WCB and to “satisfying all conditions associated with its offer as quickly as possible”.
Murray Goulburn, which had a bid for WCB rejected in 2010, also said its bid should be fully considered by Australian competition regulators, which had expressed concern over its offer three years ago, before Saputo’s interest is analysed by government officials in the country.
“Murray Goulburn believes it to be reasonable and in the national interest that Saputo’s Foreign Investment Review Board application to acquire WCB is not resolved until the public benefits of MG’s proposed acquisition of WCB have been given full consideration – pursuant to MG’s application for authorisation to the Australian Competition Tribunal to acquire WCB,” the firm said.
“MG considers its offer will bring many benefits for WCB shareholders, WCB suppliers, the Warrnambool community and the Australian dairy industry.”
Meanwhile, a spokesperson for Bega Cheese told just-food: “We will reconsider our bid when we are through our antitrust bid condition which we expect to be at the end of next week. Philosophically we see no merit in thinking further about price until we are free of our conditions.”
