WCB board backs new takeover bid

The directors of Warrnambool Cheese and Butter Factory Company (WCB) have recommended that its shareholders accept a $7 per share takeover over from Canada's largest dairy processor Saputo instead of a lower offer from Bega Cheese.

Saputo is offering shareholders an all cash off-market offer of $7 per share, an 11 per cent premium based on Bega's recent offer of $6.30 a share.

According to WCB, Saputo's offer was a better deal for shareholders with a higher offer price, the certainty of 100 per cent cash for shares and fewer conditions. Bega is, in contrast, offering 1.2 of its shares plus $2 for each WCB share.

WCB CEO, David Lord, said the WCB board had carefully considered Saputo's offer and had decided to unanimously recommend that WCB shareholders accept its offer, in the absence of a superior proposal.

"Saputo's offer underscores the strategic value of WCB's assets and vindicates the board's decision to reject Bega's inadequate, highly conditional offer. Saputo's all cash offer provides greater certainty for WCB shareholders and a substantial premium for their WCB shares," he said.

The offer is subject to approval from Australia's Foreign Investment Review Board and a minimal acceptance condition of greater than 50 per cent of WCB shares.