Australia's Freedom Foods Group today (22 June) admitted it is mulling a takeover bid for New Zealand's A2 Milk Co.
Freedom Foods, which is already a shareholder in A2 Milk, said it and an "unnamed leading international liquid dairy milk company" had put forward "an indicative, non-binding and conditional expression of interest" in the business. The group said the interest had been made "with a view to undertaking due diligence to enable the consortium to determine whether to enter a binding proposal".
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It added: "This process is ongoing and there is no certainty that an offer will be forthcoming."
Freedom Foods' announcement came after A2 Milk said "two associated trade parties" had revealed their interest in buying the business.
In a statement to the New Zealand stock exchange, A2 Milk said the single "expression of interest" was "indicative and non-binding".
A2 Milk said both suitors had said they wanted to remain confidential and it did not reveal their identity.
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By GlobalDataThe company said the proposal was subject to conditions including due diligence, exclusivity, "no material adverse change in the affairs or prospects of the company", approvals including under the New Zealand Overseas Investment Act and no change in the number of shares on issue.
"The last condition is particularly relevant as the company has recently been contemplating, and was in advanced stages of planning for, an equity raising," A2 Milk said.
A2 Milk is dual listed in New Zealand and Australia. It claims to account for 9% of the "total fresh milk grocery market" in Australia.
It has also built operations in China, the UK and, most recently, the US, where it launched its milk this spring.
Click here for an interview just-food published in December with the head of A2 Milk's UK business, Scott Wotherspoon, about the company's plans for that market.
