WCB board calls on shareholders to reject Bega offer

Warrnambool Cheese and Butter (WCB) has advised its shareholders to reject a takeover offer by Bega Cheese which its directors have described as "inadequate".

Bega is offering 1.2 Bega shares and $2.00 cash per WCB share. The WCB board said in a written statement, however, that the offer did not fully reflect the strategic value of WCB to Bega Cheese and that the Bega offer was timed to exploit recent gains in Bega's share price.

The directors also said the offer was highly conditional and uncertain, and may result in a potential tax liability for WCB shareholders.

WCB said shareholders would receive its formal response to the Bega offer around mid-October, and this would include the WCB Board's formal recommendation in relation to the Bega offer as well as more detail on its assessment of the offer, including the Investigating Accountants Report in relation to WCB's forecast for FY12.

This, the company said, would assist WCB shareholders to properly assess the future profitability and value of WCB as a stand-alone company.

“Shareholders are likely to receive further documentation from Bega soon and should be aware that they do not need to respond to Bega's documents – to reject the Bega offer, WCB shareholders should simply do nothing,” the company said.