The Murray Goulburn Co-operative announced this morning that it has revised its proposal to acquire all the issued shares in Warrnambool Cheese and Butter Factory Company Holdings Limited.
MG’s revised offer is an off market takeover offer for $9.50 cash per share, and the co-operative has also mentioned that is wishes to explore the potential of WCB paying special dividends under its revised offer in order to deliver franking credit benefits to some shareholders – a similar component was removed from Canadian processor Saputo’s most recent bid.
“The Revised Offer is a further endorsement of MG’s commitment to acquiring WCB, and delivers an Australian owned and operated company with the scale, capacity, strength and momentum to capture global growth opportunities,” the company said in a statement.
“We urge WCB shareholders to seriously consider the benefits of MG’s Revised Offer – this is an important decision that will have significant ramifications for the future of the Australian dairy industry as a whole.”
Highlights of MG most recent offer include:
- $9.50 cash per WCB share, valuing the company at $533 million
- 6% premium to Saputo’s revised $9.00 cash per share offer announced to ASX on 25 November 2013
- 6% premium to the implied value of Bega’s offer, based on the closing price of Bega shares on ASX on 27 November 2013.
- Fully funded with MG having secured debt facilities from its existing financiers, NAB, ANZ and WBC
Conditions of MG offer include no objection to the sale by the ACCC, MG having a relevant interest in greater than 50% of WCB by close of the revised offer, no material new acquisitions, disposals or other commitments by WCB beyond certain financial thresholds, and no material adverse change or prescribed occurrence events occurring with respect to WCB.
“MG remains firmly committed to acquiring WCB. A combined MG and WCB will create one of the largest Australian owned food and beverage businesses and a globally competitive dairy foods company 100% controlled by dairy farmers," said MG managing director Gary Helou.
“MG is itself entering an exciting phase of growth and has identified a series of strategic capital investments that will target a $1.00 per kilogram of milk solids lift in underlying farm gate milk prices over a five year period from FY12 to FY17. MG will deliver these benefits to supplier shareholders including those WCB suppliers who join the co-operative regardless of the outcome of the WCB bids. This further highlights MG’s commitment as a co-operative to maximise returns for supplier shareholders including those new suppliers who join the co-operative.”