Fonterra makes Yoplait disclosure after competition complaint

Related tags National foods Mergers and acquisitions Fonterra

New Zealand dairy co-operative Fonterra, currently involved in a
bidding war for Australia's National Foods, has been told by the
Australian Takeovers Panel to issue a supplementary bidder's
statement about its possible joint venture with Yoplait, after
Asian drinks conglomerate San Miguel complained, Tom Armitage

Last month San Miguel instigated a spat between the two rival bidders, after alleging that Fonterra failed to give "adequate disclosure"​ to the Australian competition authorities that it would form an alliance with Yoplait (owned by French dairy company Sodima) if its bid to buy National Foods were successful.

San Miguel previously claimed that discussions over a possible joint venture had effectively made Sodima and Yoplait associates of Fonterra - something that should have been declared prior to the bid announcement, in accordance with Australian competition protocol.

"Yoplait and Sodima should have lodged substantial holding notices annexing a copy of, or setting out details of, each agreement or arrangement between Fonterra, Sodima and Yoplait in relation to the possible joint venture,"​ San Miguel said in a statement addressed to the Takeover Panel last month.

National Foods' venture with Yoplait is worth an estimated AUS$646 million (€385 million), representing 35 per cent of the company's value. If Fonterra emerges as the successful bidder for National Foods, Sodima will net around half of this figure.

Fonterra has since agreed to assemble a supplementary bidder's statement, which it will lodge with the Australian Stock Exchange, the Australian Securities and Investments Commission (ASIC) and National Foods' shareholders, within the next 14 days.

But despite asking Auckland-based Fonterra to make the disclosure, the Takeover Panel has so far resisted issuing a declaration of unacceptable circumstances. It has, however, ruled that Fonterra must offer withdrawal rights to National Foods shareholders who had accepted its bid prior to the imminent disclosure.

Such legal wrangles are common occurrences before the outcome of fiercely contested acquisitions, as both parties seek to gain leverage over one another.

A spokesperson for San Miguel was yesterday quoted as saying the decision was a "huge win",​ while Fonterra dismissed claims that the decision would have an adverse effect on its bid.

Fonterra, which is one of the world's largest dairy co-operatives and already holds a 19 per cent stake in National Foods, reaffirmed its position as the front-runner in the National Foods bidding war by announcing a revised bid at the beginning of last month.

It lifted its previous offer of AUS$5.45 per cent to AUS$6.00 per share (10 cents higher than SMC's) - providing the dairy co-operative acquires more than 50 per cent of National Foods' shares.

Furthermore, as an incentive to shareholders, Fonterra added that it would increase this offer to AUS$6.20 if it acquired more than 90 per cent of National Foods' shares.

Fonterra and San Miguel's offers are scheduled to close on the respective dates of 19 and 15 April.

Related topics Manufacturers Fonterra

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