Canadian dairy group Saputo is to table a takeover bid for Warrnambool Cheese and Butter Factory – and has received the backing of the Australian dairy firm’s board.
Saputo said yesterday (7 October) it had agreed with the WCB board to make an all-cash offer worth A$7 a share – above a cash-and-stock bid from another Australian dairy processor, Bega Cheese.
“The offer has been unanimously recommended by the board of Warrnambool,” Saputo said. WCB’s directors will urge investors back the bid and intend to tender any shares they own in the business.
Saputo was reported to have been a bidder for WCB in 2010 when the Australian company saw off interest from local co-op Murray Goulburn.
WCB had rejected Bega Cheese’s offer, made last month, as “inadequate” and “highly opportunistic”.
Saputo said the offer meant it would pay C$378m (US$269.8m) for 100% of WCB. The bid equates the enterprise value of WCB, including debt, at around C$450m.
The Canadian company, which has been looking to enter Australia for around a decade, said the offer was subject to conditions including local competition approval and a requirement that investors holding 50% of WCB’s backed the deal. Saputo said, however, the deal is expected to close in December.
WCB’s shareholders include Bega Cheese, which owns 18% of the business. It has so far made no public statement on news of Saputo’s bid.
Murray Goulburn also owns shares in WCB and last week upped its stake to over 16%.