Just as Elders (ELD) continues to produce more twists and turns than a TV soap opera, so does the continuing battle for the cows (and farmers), milk and cheeses of Warrnambool Butter and Cheese (WCB).
Not content with a series of bids and counter bids, meetings with farmers, finessing bid details, and noisy PR campaigns, now there’s a new move (which mind you, is out of the takeover defence/attack playbook) – a complaint to the Takeovers Panel because someone reckons Warrnambool and its board are not playing fair.
Of course, no one has yet threatened to take their bat, ball and money and leave the takeover arena, but it wouldn’t surprise.
Fellow (and much larger) dairy group Murray Goulburn yesterday followed through on media reports of a complaint.
It has sought to stop its rival, Canadian dairy giant Saputo, acquiring shares in takeover target Warrnambool Cheese and Butter, claiming that a change in the Saputo offer this week means some WCB shareholders were misinformed.
The Takeovers Panel received an application from Murray Goulburn seeking interim orders stopping Saputo processing acceptances of its offer for Warrnambool shares and from acquiring Warrnambool shares on-market.
There were media reports yesterday morning that Bega Cheese (BGA) shares Murray Goulburn’s concerns about the change to Saputo’s offer (as it would, being a rival bidder).
Bega is expected to reveal this morning if it will join Murray Goulburn’s action at the Panel.
BGA Vs WCB YTD – Dairy battle sees appeal to umpire as everyone digs in
Murray Goulburn has also sought to have Warrnambool ordered to reinstate special dividends and Saputo blocked from varying its bid.
That’s after Saputo offered a 20c a share bonus for accepting shareholders once it got to 50.1% of Warrnambool’s shares with its offer.
As a result, Warrnambool withdrew special offers to shareholders of small capital returns of 46c and 84c a share.
Saputo’s price is still $9 a share, but it will rise to $9.20 once it gets to 50.1%, which means it can do without the shares held by Murray Goulburn, Bega, which is also bidding) and Japanese giant, Kirin. Together they control around 44% of Warrnambool.
In a statement to the market yesterday, the Takeovers Panel said Murray Goulburn submits that the abandonment of the special dividends meant Saputo’s bid would not conform with previous announcements, contrary to truth in takeovers policy.
Murray Goulburn also claims that shares traded before November 25 were traded "on the basis of misinformation" that franking credits of 56c a share would be available and it has sought final orders that the special dividends be reinstated and that Saputo not be allowed to vary its offer conditions after it increased its bid to $9.20.
The panel said Murray Goulburn submits that the Warrnambool board should advise shareholders to wait until the bid is in its final stages, or bidders have declared their bids final; and Warrnambool should release the bid implementation agreement between Warrnambool and Saputo to the market, in line with market practice.
The Takeovers Panel said it hadn’t decided yet whether to conduct proceedings over Murray Goulburn’s complaint.
In a statement, Warrnambool Cheese and Butter said it disagreed with the basis of Murray Goulburn’s complaint and would respond in accordance with Panel procedures. Saputo also revealed it has built its stake in Warrnambool to 4.799%.
Warrnambool Cheese and Butter shares were down one cent to $9.25.
