Warrnambool Cheese and Butter (WCB) has advised its shareholders to take no action on Bega's takeover offer, which the company has described as "highly opportunistic".
WCB is advising its shareholders to hold off on acting until mid-October, when its directors will issue their formal recommendation regarding the offer.
“Given the highly favourable outlook for WCB, we consider the timing of the offer to be highly opportunistic,” the company said in a statement to its shareholders.
In July, WCB announced it expected its net profit to come in at about 52 per cent below that of last year, better than previously forecast thanks to recent improvement in trading conditions and overall business performance.
In its latest statement to shareholders, WCB said the company remained focused on implementing business improvement initiatives. These, combined wtih expected improvement in global dairy markets and the weakening of the AUD, provided a positive outlook for its future growth and profitability, according to WCB.
“WCB directors will assess these factors as we consider whether Bega's offer adequately reflects the value of the WCB business today, the expected future earnings uplift from the initiatives currently underway and the improving market conditions.”
The takeover offer, which opens late next week and will remain open for at least a month, also hinges on cooperation from rival processor, Murray Goulburn, which owns 16.3 per cent of WCB. Murray Goulburn has said it will now take time to consider the detail of the offer.
The takeover, if successful, will result in the creation of one of Australia's largest listed food companies.
