The independent directors of Open Country Cheese have usrged shareholders to resist a takeover bid from Dairy Trust.
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Dairy Trust has offered 1.68 Dairy Trust shares for each Open Country share, valuing Open Country shares at NZ$2.25 (US$1.64). This is believed to be “inadequate” by Open Country’s directors, chairman Duncan Milne wrote in a letter to shareholders.
Dairy Trust did not provide a cash alternative to its scrip-only offer.
According to Milne, the offer fails to take into account the future prospects of Open Country.
“The initial reaction from the independent directors, based on Open Country’s future prospects and the absence of a cash alternative within the offer, is that the offer is inadequate,” Milne said.
“The independent directors strongly recommend that shareholders do not accept the offer until they have had an opportunity to consider the Independent Adviser’s Report and the independent directors make a formal recommendation as required under the Takeovers Code.”
