Saputo steps up bidding war for Warrnambool

The bidding war for Warrnambool is showing no sign of slowing down as Saputo posts a revised takeover offer of $8.00 cash per share.

The Canadian dairy giant presented its latest offer to Warrnambool late yesterday afternoon, and the WCB board has unanimously recommended that shareholders accept the revised offer in absence of a superior proposal.

Saputo’s offer comes just days after Victorian dairy cooperative Murray Goulburn made an unsolicited, off-market takeover offer of $7.50 cash per share.

CEO and managing director of WCB, David Lord said that Saputo’s offer is superior to Murray Goulburn’s.

“The Board continues to focus on maximising value for shareholders, so we carefully considered the proposal from Murray Goulburn including seeking further information on their proposal,” said Lord.

“However, subsequent to those discussions, we received the Revised Saputo Offer which we consider superior both in terms of price and conditionality to the alternatives”

Highlights of the revised Saputo offer include:

  • Recommended Offer of $8.00 cash per WCB share, valuing WCB at $448.8 million on a fully diluted basis
  • The Revised Saputo Offer gives WCB the discretion to pay two fully franked special dividends of up to $1.31 per share in aggregate. Any special dividends would be deducted from the Offer price of $8.00 cash per share payable by Saputo

o   If Saputo obtains an interest in at least 50.1% of WCB shares, WCB may pay an initial special dividend of up to $0.46 per share

o   If Saputo obtains an interest in at least 90% of WCB shares, WCB may pay a subsequent special dividend of $0.85 per share

  • Saputo has made assurances about supporting WCB suppliers. It has also indicated it will retain employees and WCB’s corporate identity and brands. Saputo has the strategic intent and financial capacity to invest further in WCB

Saputo’s offer is subject to a number of conditions including approval from Australia’s Foreign Investment Review Board, however the full agreed terms and conditions of the offer remain the same as set out in WCB’s ASX announcement on 8 October 2013 with the exception of the revised price.

In addition to Murray Goulburn and Saputo’s offers, Bega Cheese Limited also made a takeover offer for the dairy company last month.

Warrnambool’s directors stated that Bega’s offer did not adequately reflect the strategic value of WCB to Bega, and that the offer is highly conditional and uncertain – with the potential to result in further tax liability for WCB shareholders.



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