As the bidding war for Warrnambool continues to gain momentum, analysts have predicted that the Victorian dairy’s share price could reach highs of $11 before it is snapped by the most attractive takeover bid.
Trading at $8.55 at close of business yesterday, Warrnambool’s shares are continuing to trade at exceptionally high rates due to the expectation that one of the three suitors bidding for the company; Bega, Murray Goulburn and Canada’s Saputo will raise their current offer, The Australian reports.
Since Bega initially made a bid for the company, Warrnambool’s share price has doubled.
As it stands, Canadian dairy processor Saputo is offering the most attractive bid, and Warrnambool's board of directors has urged shareholders to accept Saputo’s offer in the absence of a superior proposal.
Should Saputo secure the takeover deal, the transaction will be subject to a number of conditions including approval from Australia’s Foreign Investment Review Board, in contrast to Bega who last week was given the go-ahead by the ACCC for the acquisition.
Debate surrounding the importance of keeping the company within Australian hands is also a pressing factor in the sale.
Victorian Agriculture and Food Security Minister, Peter Walsh said that sale of Warrnambool to foreign businesses could represent a ‘lost opportunity’ for the Australian dairy industry.
I think it would be good for the dairy industry if it was a consolidation of dairy assets within Australia so we'd actually have critical mass to compete on the world market," said Walsh.
"I think there was a lost opportunity when … grower-controlled grain marketing organisations were publicly floated and are now owned by multinationals.”