Australia

Murray Goulburn struggling to find suitor for buyout

By RJ Whitehead

- Last updated on GMT

Murray Goulburn struggling to find suitor for buyout
Troubled Australian dairy co-operative Murray Goulburn has called for an end to media speculation over a potential buyout—even calling into question the likelihood of a takeover itself. 

The press has reported that a number of suitors have been lining up as possible bidders for the milk processor, from local rivals Bega Cheese and Saputo-owned Warrnambool to giants Fonterrra and China's Yili.

But rumours that MG had received a substantial formal bid were put to pasture in an official statement from the company. These were fuelled by an announcement at its full-year results presentation last month that it had fielded buyout offers and proposals for some of its assets.

Now, while confirming it had received a “number​” of “indicative proposals​”, MG stressed that these were non-binding. 

The latest statement said: “These proposals have ranged from the sale of certain assets to whole of company transactions. No offer has been received for the units in MG Unit Trust for A$1.20 per unit, as speculated in the media​.”

This was backed up by Yili in a submission to the Shanghai Stock Exchange, claiming that media coverage of the A$1.20 bid had been “inauthentic​”.

MG went on to confirm that it is assessing a number proposals, including valuation, though “at this point it is too early to make any comment about valuation or implementation​,” it said.

MG notes there is no certainty that any transaction will eventuate​,” the company added.

A buyout from Yili, which makes milk products for the Chinese market, would need to be approved by the Foreign ­Investment Review Board.

In the year to June, MG suffered a net loss of A$370.8m (US$295m), down from a A$39.8m profit a year ­earlier. It’s financial performance was hit hard when it was forced in May to write off almost A$150m in debts owed by farmers following last year's slump in milk prices.

Chief executive Ari Mervis said in August that the last year had "tested the resolve and strength​" of suppliers, and said the "coming months would be pivotal for the future of the business​".

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