Quebec-based dairy processor, Saputo, announced earlier today that it had increased its all-cash takeover bid for WCB to AU$9.00 (US$8.40) per share – mirroring the offer tabled by Murray Goulburn earlier this week.
Murray Goulburn, which is Australia’s largest dairy cooperative, unveiled an improved conditional offer worth approximately AU$505m (US$470m) on 13 November.
The following day, Aussie dairy Bega Cheese lodged its second and “final offer” for WCB - 1.5 Bega Cheese shares and AU$2.00 (US$1.87) per WCB share. Bega valued the deal at AU$8.87 (US$8.27) per share.
Following an assessment of all three offers, WCB’s board of directors “unanimously” recommended Saputo’s bid over those announced by Murray Goulburn and Bega Cheese.
Execs to “accept the revised Saputo offer”
Commenting on the board’s decision, WCB chairman, Terry Richardson, said that Saputo’s offer was supported by the board “in the absence of a superior proposal.”
“The board’s recommendation reflects the increased cash consideration offered by Saputo and the compelling timing and execution certainty that it provides particularly compared to the highly conditional Murray Goulburn proposal,” said Richardson.
“The revised Saputo offer is also superior and more certain than the final Bega part scrip, part cash offer due to the inherent risks for WCB shareholders in accepting Bega shares.”
WCB added in a statement that each company director and executive “intends to accept the revised Saputo offer for all shares they hold or otherwise control.”
“Take no action”
Today’s recommendation by WCB is the third given by the company to bids by Saputo. Prior to this week’s activity, Saputo’s 24 September AU$8.00 (US$7.48) per share offer was the best lodged to date.
Responding to the offers tabled by Murray Goulburn and Bega Cheese this week, WCB urged company shareholders to “take no action” until the bids had been assessed.
Further signs that WCB was holding out for an improved offer from Saputo emerged earlier today, when it announced that it had made a request to the Australian Stock Exchange (ASX) to grant an immediate halt to trading.
WCB requested the trading halt “in respect of the negotiation of a proposed revised offer from Saputo Dairy Australia Pty Ltd (Saputo) in relation to Saputo’s off-market takeover bid to acquire all of the shares of WCB.”
“Best placed” to accelerate growth
WCB manufactures a wide range of dairy product, for the Australian market and export, including cheese, butter, fresh milk, milk powder, and whey protein concentrate.
If successful in its acquisition of WCB, Saputo, which boasts operations in Canada, the US, and Argentina, will take its first steps Down Under.
Outlining it plans for WCB, Saputo believes it is “best placed to accelerate the growth in Warrnambool business."
“As one of the largest international dairy companies, Saputo believes that by working with Warrnambool’s management team and investing in Warrnambool’s operations, it can greatly assist Warrnambool’s future development and accelerate its growth, nationally as well as internationally,” Saputo said in the statement detailing its latest offer.