New Zealand dairy giant Fonterra announced today (Wednesday) that it will top rival bidder San Miguel Corporation's offer for National Foods.

Fonterra's revised offer is $6.00 (US$4.68) per share, it said.  It will offer $6.20 per share if it acquires 90% or more of National Foods.

Fonterra's $6.00 per share compares with San Miguel's $5.90 per share.  On 31 January 2005 National Foods paid shareholders a dividend of 10 cents per share and San Miguel's $6.00 offer will be reduced by this 10c per share.

Fonterra's offer includes an option for shareholders to accept cash or Redeemable Preference Shares (RPS), or a mixture of both.

Fonterra also confirmed that Yoplait has agreed to continue to support National Foods under Fonterra ownership.  Fonterra will waive all of the conditions of its offer, other than the 50% minimum acceptance condition.

An offer of $6.20 per share values National Foods at $1.9 billion.  Fonterra is already National Foods' largest shareholder with a 19.02% stake in the company.
Fonterra chief executive Andrew Ferrier said that since its original offer, Fonterra had assessed the San Miguel offer and completed due diligence on National Foods.

"We now have a more informed view.  The due diligence confirmed our assessment that National Foods presents a valuable strategic opportunity for Fonterra.  This has enabled us to make this attractive revised offer to National Foods shareholders." said Ferrier.

If National Foods shareholders accept Fonterra's offer of $6.00 per share and Fonterra acquires 90% or more of National Foods, those shareholders will automatically receive the higher price of $6.20 per share.

If Fonterra ends up owning 100% of National Foods, Mr Ferrier said that Fonterra and Yoplait may establish a joint venture in Australia and New Zealand, but that decision would be taken at a later date.

Fonterra chairman Henry van der Heyden said that the asset was a good fit for the company's strategic ambitions in Australia.

"It makes good sense for us to grow our Australian consumer foods business and, importantly, we are pursuing our strategy for Australasia in a way that will deliver value to our shareholders," he said.

"We are committed to Australia and see a lot of merit in strengthening the respective positions of the Australian and New Zealand dairy industries," he said. "There is a lot to be gained from improving our global competitiveness and from working together to remain competitive against the emergence of low-cost competitors elsewhere in the world.  Global demand is growing and it is in New Zealand and Australia's interests to position ourselves to take advantage of that growth."