Murray Goulburn raises offer for Warrnambool to A$505 mn
13 November 2013
The battle for control for Australia's Warrnambool Cheese & Butter Factory Co (WCB), escalated yesterday after Murray Goulburn Cooperative Co, the country' biggest milk processor, raised its takeover offer to A$505 million ($470 million), topping two rival bids.
Murray Goulburn, which already holds 17 per cent of WCB, raised its October offer of A$7.50 per share to A$9 a share in cash.
Its latest offer is 13 per cent higher than the A$8 per share tabled by Canada's Saputo Inc and 24 per cent above Bega Cheese Ltd offer made in September.
WCB's board, which had earlier recommended Saputo's offer to shareholders, will meet to consider the improved bid.
Gary Helou, managing director at Murray Goulburn, said, ''Murray Goulburn remains firmly committed to acquiring WCB. A combined Murray Goulburn and WCB will create a globally competitive dairy food company which will deliver many opportunities for Australian dairy farmers and their communities."
Murray Goulburn had earlier said that the proposed takeover will create one of the largest Australian-owned food and beverage businesses, with annual revenues of more than $3.2 billion.
Buying WCB, which also supplies milk to make Philadelphia cream cheese, would give Murray Goulburn control of a neighbouring processor and key export infrastructure.
Bega Cheese, which holds 18.3 per cent in WCB, kicked off the battle to control WCB in September when it launched a stock-and-cash offer that valued the company's shares at A$5.78 apiece. This triggered a rival offer next month from Saputo, which offered A$7 a share and soon followed by Murray Goulburn with A$7.50 per share. Saputo raised its offer last month to A$8 a share.
Murray Goulburn is currently the only bidder still to get approval from Australian regulators to go ahead with its offer, but it aims to lodge submissions by 29 November.
But, late last month, Japanese brewer Kirin Holdings Co Ltd acquired 9.99-per cent stake in WCB, a move that was aimed to have a say in the takeover of WCG since its Australian subsidiary Lion Co owns iconic cheese brands such as Coon, King Island Dairy and Cracker Barrel, which are produced by WCB, and packaged and sold by Lion.
Early this month, New Zealand's Fonterra Co-operative, which licenses the Bega brand and has a cheese supply contract with Bega Cheese, acquired a near 6-per cent stake in the company.
Listed on the Australian Stock Exchange, WCB is one of the largest milk processors in Australia, operating two manufacturing sites in South West Victoria and South Australia where it employs over 420 people.
It produces a range of dairy products for domestic and export markets, including cheese, butter and butter blends, milk, cream and dairy ingredients.
For the financial years ended 30 June 2013 and 2012, WCB reported consolidated revenues of CA$477 million and CA$479 million, respectively.