Goodman Fielder gives new takeover offer the green light

Goodman Fielder has accepted a revised takeover offer worth $1.37 billion from its Asian suitors, Singapore's Wilmar International and Hong Kong's First Pacific.

Goodman Fielder, which makes Helgas, Meadow Lea and Praise-branded products, recently rejected a 65c a share offer from the pair, which they have now revised upwards to 70c a share.

The company's acceptance of the new offer is conditional upon the bidders entering into a scheme of arrangement and the absence of a superior proposal during a period of non-exclusive due diligence.

According to Fairfax Media, Wilmar is controlled by a Malaysian billionaire whose nephew Kuok Khoon Hong has been one of the key players on the bidding side; First Pacific is headed by Indonesian tycoon Anthony Salim.

According to this report, the Goodman Fielder board was given little time to respond to the revised offer.

Fairfax Media also wrote that the revised offer was not as high as investors or the board wanted but the company was left with little choice after a series of earnings downgrades left it vulnerable to a takeover.

Goodman Fielder chairman, Steve Gregg, said the revised proposal from Wilmar and First Pacific maximised value for shareholders.

“Since the initial approach from Wilmar and First Pacific, the board has been focused on generating the best outcome which maximised value for our shareholders.

“In the absence of a superior proposal and subject to various other conditions, we believe this revised proposal is consistent with that objective.

“We believe this revised proposal also demonstrates the strength of our underlying business and brands but also the opportunity to leverage these assets to grow the business across the Asian region,” Gregg said.

The previous offer valued the shares at $1.27 billion; the company responded to the offer saying it “materially undervalues Goodman Fielder and is opportunistic” given its depressed share price.

Goodman Fielder recently announced it was predicting lower than expected full-year financial results and would speed up its cost-cutting program, mostly through reduced headcount, as a result of deteriorating market conditions.