Troubled Australian food manufacturer braced for a takeover

Ailing food manufacture, Goodman Fielder, has been recognised as a takeover opportunity, after a sharp drop in its valuation and the recent departure of both Chief Executive Peter Margin and Chief Financial Officer David Goldsmith.

Last week saw the company, who are known for brands such as Activate Probiotic Drinks and Paul Newman pasta sauces, saw its shares plummet more than 9 percent, wiping out around $150 million from its valuation.  This drop follows an earlier announcement from Goodman that it’s full-year profit forecast would be 20 percent lower than expected: between $140m – $150m.

Shares had picked up slightly by the end of the week, but a combination of high commodity costs, loss of market share and the rising Australian dollar has placed Goodman in a vulnerable position.

The Wall Street Journal reported UBS analyst Lindy Newton as saying, “Given valuation and management void Goodman appears vulnerable to take-out.” The paper also quoted Goldman Sachs analyst Phillip Kimber as suggesting that private equity was the most likely course.


Image courtesy of https://topnews.net.nz

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