Warrnambool Cheese Asks Shareholders To Reject Murray Goulburn's Takeover Bid

Warrnambool Cheese directors have unanimously asked shareholders to reject Murray Goulburn’s takeover bid in favour of an offer by Canadian-owned Saputo.

The company, which has fielded three takeover bids since September, told shareholders this afternoon that they would shortly receive a replacement statement with a conditional offer for $9.50 a share from Murray Goulburn.

Importantly, the offer needs to be approved by a minimum of 50% of WCB shareholders and the Australian Competition Tribunal.

“The WCB board has spent considerable time evaluating the revised offers from MG and Saputo, noting that Saputo’s offer is now final,” WCB chairman Terry Richardson said.

“Although MG’s offer price of $9.50 is $0.50 higher than Saputo’s offer price of $9.00 – ignoring potential price increases at different Saputo ownership thresholds – MG’s offer remains highly conditional and therefore carries significant risks and uncertainties for WCB shareholders.

“By comparison, the $9.00 cash offered by Saputo under its unconditional offer is certain and will be paid within 5 business days.”

WCB’s third suitor, Bega, will officially drop out of the race this evening when its bid – valued at $8.60 a share – expires.

As of Tuesday, Bega’s offer had the support of fewer than 1% of WCB shareholders, while Saputo had the tentative support of 16.9%.

WCB’s share price has rocketed in the three months since its first takeover offer, from $4.50 in mid-September to $9.25 today.

The company today said it expected to earn about $59 million in the six months to 31 December 2013, which is twice what it made in the same period last year.

“Strong international dairy commodity demand and pricing, a depreciating Australian dollar and a continued focus on business improvement, product mix and strategic initiatives are contributing to the improved result,” CEO David Lord said.

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