Dairy Trust, a subsidiary of New Zealand meat processor Affco, has won its battle for a controlling stake in cheese company Open Country Cheese (OCC), after it lodged an improved offer.
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One of the three OCC independent directors holding out against the offer changed his mind after being offered 1.75 Dairy Trust shares for every share in OCC. Initially, Dairy Trust had offered 1.68 shares for every OCC share.
Ironically, Dairy Trust’s bid to acquire OCC was assisted by a surprise raid on the company’s shares by an overseas bidder, Olam International of Singapore, last month. Olam currently owns 19.9% of the company.
Bruce Clothier, who owns a 1% stake in the company, said he felt that it was important for shareholders and milk suppliers that OCC remained a New Zealand-controlled company. OCC chief executive Alan Walters also agreed to sell his minor shareholding to Dairy Trust. The Affco subsidiary held 43% of OCC before the takeover bid through common shareholding, and has now exceeded its 50.01% target.
Dairy Trust chairman Sam Lewis said that while a number of factors influenced OCC shareholders to sell, he considers the most important was the belief that they would be selling to “good business people”, with “local support”.
Lewis told New Zealand’s Rural News that the offer had been extended until 24 July to complete paperwork but he expected all acceptances to be honoured during the extension period.
Olam is not expected to attempt to increase its stake. It would be required to lodge an official takeover bid once it reached 20%.
