Canadian dairy giant Saputo has secured a majority stake in Warrnambool Cheese and Butter (WCB) after a hard-fought, three-way battle to acquire the Australian dairy processor.
Quebec-based Saputo, which already boasts operations in Canada, the US, and Argentina, announced yesterday that it has acquired 52.7% of the issued shares in Victoria-based WCB and “now has majority control of Warrnambool.”
WCB, which manufactures a wide range of dairy products for the Australian market and export, became the unexpected subject of a three-way bidding war between Saputo, Bega Cheese and Australian dairy cooperative Murray Goulburn last year.
Saputo’s announcement seemingly brings to an end the battle, making it impossible for rival bidder Murray Goulburn to move forward with its takeover offer.
Australian cheese manufacturer Bega Cheese, which opened the bidding in September 2013 with a cash and share bid of AU$5.78 ($5.09, €3.74) per WCB share, dropped out of the race last week after agreeing to sell its 18.8% stake in WCB to Saputo.
Since Bega’s initial bid, the price of WCB shares has increased from AU$4.51 ($3.97, €2.92) to AU$9.35 ($8.23, €6.05).
Increased offer price
Having reached an interest in WCB greater than 50%, Saputo’s offer will now increase from AU$9 ($7.92, €5.82) per share AU$9.20 ($8.10, €5.95) per share. Its offer will again increase to AU$9.60 ($8.45, €6.21) if it shareholding increases to more than 90%.
“In accordance with Saputo’s offer, Saputo will increase the offer consideration from AU$9 to AU$9.20 cash per Warrnambool share, having reached a relevant interest of greater than 50% during the offer period,” said Saputo.
“As a result of Saputo’s relevant interest in Warrnambool increasing to more than 50% and the increase in offer price occurring within the last seven days of the scheduled close of the offer period, the offer period is automatically extended pursuant to Australian law.”
Saputo’s offer period, which had been due to close today, has been extended to 7pm Melbourne time on Tuesday 4 February 2014.
In a statement recognizing Saputo's majority shareholding in WCB, Murray Goulburn said it "will not commercially assess this development, including in relation to MG’s in relation to MG’s 17.7% shareholding in WCB.”
“MG will not be making any further media statements until such time as a decision has been made and relevant stakeholders advised," the statement added.