The a2 Milk Company says a joint expression of interest from Freedom Foods and US food giant Deans Foods is not compelling and will not be recommended to its shareholders.
Last month a2 Milk received a joint expression of interest in acquiring all of its shares from the two companies, which it has been evaluating.
“The board does not consider that the proposal in the EOI is compelling, and accordingly the board would not be in a position to recommend it to shareholders,” the company's managing director, Geoffrey Babidge, said in a statement.
However Babidge said the door was still open for discussion with its suitors. Meanwhile, he says a2 Milk has also received “other confidential enquiries indicating potential interest in the company” and it was in the course of evaluating these.
“The board has advised Freedom / Dean Foods that it is willing to have a discussion in relation to the EOI subject to agreement on appropriate confidentiality and related undertakings customary in situations of this nature,” Babidge said.
“The board remains of the view that there is no certainty that any proposal will result in a transaction or offer capable of acceptance by the company or its shareholders, and that a takeover offer is not imminent.”
In a financial update a2 Milk also said its Australian and New Zealand business is performing strongly and continues to provide a platform for the company’s international growth initiatives.
The underlying trading result for the 2015 financial year is ahead of plan with revenue of NZ$154 million, a 39 per cent increase over the previous corresponding period.
According to the company, strong growth is expected to continue next financial year.
