Rival bidder Murray Goulburn questioned Saputos latest bid

Rival bidder Murray Goulburn questioned Saputo's latest bid

Australia's Takeovers Panel has put Saputo's bid to buy local dairy processor Warrnambool Cheese and Butter Factory on hold.

The regulator has placed "interim orders" on Saputo's move for WCB after a complaint from rival bidder Murray Goulburn, the Australian dairy co-operative.

The orders mean Saputo must stop processing any acceptances for its lastest bid for WCB, which faced criticism from Murray Goulburn. The move, which could last for up to two months, gives the Panel more time to consider the offer, it said.

Last week, Saputo increased its bid for WCB to A$9.20 a share - should it attain more than 50% of the business.

Murray Goulburn challenged the offer, pointing to the withdrawal of plans to offer WCB's shareholders special dividends.

Saputo's A$9.20-a-share bid would no longer include WCB's plans to pay special dividends to its shareholders, a proposal set out earlier this month. WCB, which has backed Saputo throughout the takeover battle, had planned to pay out the dividends if the Canadian company reached certain thresholds of ownership. The dividends would be deducted from the A$9 a share offer. WCB said it no longer intended to pay the dividends.

Murray Goulburn argued the withdrawal of the dividends meant WCB shares traded between 15 and 25 November "on the basis of misinformation as to the terms of the Saputo bid, namely that Warrnambool shareholders would contingently receive franking credits of up to A$0.56 per share".

Murray Goulburn has since tabled an offer for WCB of A$9.50 a share.

Saputo, which before the Panel's notice had received acceptances from WCB shareholders worth 9.65% of the business, warned the Australian firm's investors it would not be able to pay any who wished to further hand over their stock.

A filing from WCB issued today said Saputo's stake had grown to 10.99%.

Murray Goulburn holds around 18% of WCB, as does a third bidder, Australian dairy firm Bega Cheese. In the early weeks of the bidding, Japanese food and drink giant Kirin Holdings, owner of Australian dairy business Lion, also became a WCB shareholder, snapping up a 9.99% stake.