The Warrnambool Cheese and Butter board of directors has backed a new $9 takeover offer from Canadian dairy company Saputo.
The Canadian company revised its offer soon after Bega boosted its cash and share bid to $2 cash plus 1.5 Bega shares and Murray Goulburn (MG) raised its offer to $9 cash per share.
Only Saputo and Bega so far have regulatory approval for a takeover. Saputo's previous offer was $8 a share, and as it has in the past, WCB's board has unanimously recommended shareholders accept the bid. It has also recommended that shareholders reject the latest offers from Bega and Murray Goulburn.
WCB chairman, Terry Richardson, said Saputo had made commitments to job security and the payment of a leading competitive milk price.
“It has the balance sheet strength to invest in WCB and has also stated that WCB will become an important part of Saputo's global operations and its main platform from which it would service the demand for dairy products in the Australian market and the Asia Pacific region,” Richardson said.
He also said Bega's current share price did not reflect underlying fundamental value since it was inflated by takeover speculation, and though Murray Goulburn's offer was the same as Saputo's, it was inferior in terms of timing and execution certainty.
“The revised Saputo offer will not have any of the delays and execution uncertainties associated with the revised MG offer, which is subject to numerous conditions including authorisation from the Australian Competition Tribunal. Both the timing and outcome of this authorisation process are uncertain,” Richardson said.
“In addition, MG has given little detail of its intentions for the WCB business in the future and your directors are concerned that it may lessen competition for milk supply in the region.”
Saputo recently revised its WCB takeover offer to $9.
