Saputo’s rival ups its bid for Australian dairy
By Food in Canada magazine staffBusiness Operations Saputo Inc.
Saputo’s rival, Murray Goulburn, has increased its bid for the Australia-based Warrnambool Cheese & Butter Factory
Montreal – Murray Goulburn Cooperative Co., one of the largest dairy processors in Australia, has increased its takeover offer for the same company Saputo Inc. is after.
Saputo bid Cdn$378 million or AU$7 per share for Warrnambool Cheese & Butter Factory earlier in October. Later that same month, Saputo increased its bid to AU$8 per share. Murray Goulburn is now offering US$470 million or AU$9 per share, which is up from its earlier bid of US$420 million or AU$7.50 per share.
The SydneyMorningHerald.com.au reports that Murray Goulburn’s new offer came just a day after Joe Hockey, Australia’s treasurer, gave Saputo foreign investment approval on Nov. 12.
Murray Goulburn’s offer now tops both Saputo and Bega Cheese Limited, another Australia-based dairy company.
In September, Bega Cheese offered $319 million, which had initially won unanimous backing from the Warrnambool board. Bega Cheese is based in the Bega Valley in Australia and says more than 60 million Bega branded products are sold throughout Australia each year.
The HeraldSun.com.au reported that Warrnambool’s board then recommended shareholders accept Saputo’s offer instead, calling it a superior offer – unless a better one came along.
Bega holds 18 per cent of Warrnambool and Murray Goulburn holds 17 per cent, according to data compiled by Bloomberg, says the MontrealGazette.com.
If Murray Goulburn’s offer is successful it would create one of the largest Australian owned food and beverage businesses and create a globally competitive dairy food company 100 per cent controlled by dairy farmers. The company says it plans to invite Warrnambool suppliers to join the cooperative, which it plans to rename Murray Goulburn Warrnambool, reported the HeraldSun.com.au.
The SydneyMorningHerald.com.au also says Warrnambool’s board has supported Saputo’s offer but in a statement this week it urged shareholders to “take no action” as it considered its options.
The three-way contest for the maker of brands including Sungold milk and Great Ocean Road cheese has more than doubled Warrnambool’s market value in the two months since Bega’s initial bid, the MontrealGazette.com. The bidders are seeking to raise production and add export infrastructure amid rising demand in Asia.
Murray Goulburn’s new offer “defies any commercial common sense,” said Mark Topy, a Melbourne-based analyst at Canaccord Genuity Group Inc., reports the MontrealGazette.com. “This really is a pretty aggressive strategy, they want this asset at all costs, irrespective of how it could endanger their own financial position.”
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