Murray Goulburn lifts stake in dairy rival Warrnambool Cheese and Butter, which sells milk under the Sungold brand.

Murray Goulburn boosts investment in dairy rival

18 April 2013

Murray Goulburn Co-operative has lifted its stake in its competitor Warrnambool Cheese and Butter (WCB) to 14.5 per cent in a move described by the company as a strategic investment.

However, Murray Goulburn (MG) has denied the $5.5 million investment in an additional 1.2 million shares was in preparation for a takeover offer.

The company previously owned 12 per cent of WCB - its smaller listed rival - and Murray Goulburn managing director Gary Helou said the acquisition of the additional shares was “a reconfirmation of Murray Goulburn’s commitment to its long-term investment in WCB”.

“This is a strategic investment and there is no current intention to make a takeover offer for WCB, nor do we currently intend to seek Board representation,” he said in a statement.

Murray Goulburn has also announced it is willing for a limited period of time to acquire additional shares in WCB at the same price of $4.60 per share.

“There is however no assurance MG will acquire any further shares in WCB. MG is satisfied with its 14.5% stake,” the company said.

The maximum MG can acquire under the Corporations Act consistent without making a takeover offer, however, is 19.9 per cent of WCB.