The Takeovers Panel, the primary forum for resolving takeover disputes in Australia, announced earlier today that Murray Goulburn had asked that Saputo also be “restrained from processing acceptances and acquiring Warrnambool shares.”
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 Canadian dairy giant, Saputo, and Australian dairy processors, Murray Goulburn and Bega Cheese in October.
Earlier this week, Quebec-based Saputo announced that its 15 November offer will increase from AU$9.00 (US$8.20) per share to $9.20 (US$8.40) per share if more than 50% of WCB’s shareholders accept the offer. It also removed all conditions and special dividends from the deal.
WCB’s board of directors reaffirmed its “unanimous recommendation” to shareholders that they accept Saputo’s revised offer “in the absence of a superior proposal.”
Murray Goulburn, which has been hot on the heels of Saputo throughout the bidding process, claims however that the abandonment of these special dividends breaches Australian takeover law.
Saputo “be restrained”
According to the Takeovers Panel announcement, Murray Goulburn claims that Saputo “will not vary its bid to conform with the previous announcements made by Saputo and Warrnambool, contrary to s631(1) and truth in takeovers policy.”
“Warrnambool shares traded from 15 to 25 November 2013 on the basis of misinformation as to the terms of the Saputo bid, namely that Warrnambool shareholders would contingently receive franking credits of up to $0.56 per share," it said.
On the back of these claims, Murray Goulburn has called on the WCB board to “advise shareholders to wait until the bid is in its final stages, or bidders have declared their bids final.”
The Takeovers Panel announcement added: “Murray Goulburn seeks interim orders, including that Saputo be restrained from processing acceptances and acquiring Warrnambool shares on market. Murray Goulburn seeks final orders, including that Warrnambool reinstates the previously proposed special dividends, Saputo be restrained from varying its bids to provide for the conditional payments of the additional $0.20 per share and further disclosure.”
WCB “disagrees with the basis”
Murray Goulburn’s request to the Takeovers Panel follows its earlier claims that “the amended terms represent a reduction in the implied value of Saputo’s offer to certain WCB shareholders, given that the previously announced franking credit benefit of $0.56 per share will no longer be available as a result of the removal of the special dividend component of Saputo’s offer.”
As it stands, the Takeover Panel has yet to decide “whether to conduct proceedings.”
“The Panel makes no comment on the merits of the application,” the Takeover Panel announcement added.
Responding, WCB said it “disagrees with the basis for that application” but declined to comment any further.