Murray Goulburn announces bid for Warrnambool

Murray Goulburn has entered a bid for Warrnambool Cheese and Butter, making it the third dairy company to enter a takeover offer.

Murray Goulburn’s has proposed to acquire all the issued shares in Warrnambool via an off-market takeover offer for $7.50 cash per share.

Philip Tracy, Murray Goulburn’s chairman said were the bid to be successful, it would provide invaluable benefit to farmers and remain Australian owned.

“This is an historic opportunity for Murray Goulburn and WCB suppliers and shareholders to create a larger scale, globally competitive Australian dairy food company owned and controlled by Australian dairy farmers. Importantly, it will retain the primary objectives of a co-operative in maximising farm gate returns for farmer owners,” he said.

“It will also support on-farm and industry investment, and in turn grow the Australian dairy industry for the benefit of regional communities.”

According to the statement released by Murray Goulburn this morning, the deal would be fully funded, having secured additional debt facilities from its existing financiers; NAB, ANZ and Westpac.

The deal would create a new 100 percent Australian farmer-controlled dairy food company with strong growth potential in both domestic and international dairy markets with forecasts revenues in financial year 2014 of $3.2b including export sales of $1.4b to over 60 countries.

Warrnambool released a Target’s Statement to shareholders earlier this week, urging them to reject Bega Cheese’s offer to purchase share sighting that Bega’s offer was ‘materially inadequate’, and neither fair nor reasonable.

Warrnambool directors stated that Canadian dairy company, Saputo’s offer was superior to Bega’s.

Saputo is offering an all cash takeover offer of AU$7.00 per share for all the shares in Warrnambool on issue at the end of the offer period, representing CA$378m, which is now $0.50 below Murray Goulburn’s offer.