Fonterra continues battle to acquire National Foods
takeover bid for Australian-based National Foods on the grounds
that the AUD$2 billion (€1.14bn) asking price is too much.
Fonterra's threat comes despite the New Zealand competition watchdog giving the greenlight for it to acquire 100 per cent of the shares in National Foods. The watchdog said it was satisfied with all the proposals and could see no reason that the deal would significantly reduce competition in the relevant markets.
But despite this an increasingly bitter battle is evolving over the share price for the deal. National Foods has strongly criticised Fonterra's offer of AUD$5.45 for the company, saying it grossly undervalues the company.
In response Fonterra has said that National Foods' valuation of AUD$6.11 to AUD€6.65 it has rejected the valuation outright, stating that the company's target statement did not contain an independent expert's valuation.
Fonterra CEO Andrew Ferrier said that an independent valuation was a key issue to create the grounds for a debate that would eventually benefit retail shareholders.
"We have been hearing for some weeks from National Foods of gross undervaluation," said Ferrier. "Investors would benefit from a comprehensive independent expert's report."
Fonterra believes that its existing offer is way and above the AUD$4.45 level at which shares were trading before it announced its plans to bid for National Foods. However, shares are currently trading at around the AUD$5.90 mark, following speculation over the announcement.
The next deadline in the bidding war falls on 14 December, when Fonterra must either increase or change its bid, or else drop out of the bidding altogether.
