The great cheese takeover soap opera continues with yet another bid increased – this time from Murray Goulburn, which was only moaning about the rival offer from Saputo of Canada, to the takeovers police on Wednesday.
Murray Goulburn’s $9.50 new cash offer is up from the former $9 cash offer and is now higher than the latest offer from Saputo of $9.20, which will be reached once a 50.1% level had been reached.
But is conditional upon Murray Goulburn attaining more than 50% of Warrnambool’s (WCB) shares and obtaining regulatory approval.
The offer values Warrnambool at $533 million, which is around $213 million more than what Bega Cheese (BGA) offered on September 12 when it kicked off the bidding war, which is now reaching absurd levels.
Murray Goulburn’s higher offer seems to have been made to trump Saputo’s basic $9 a share offer, with the extra 20c twist, which it can start paying shareholders under its now its unconditional offer. Saputo has close to 5% of Warrnambool’s shares.
Murray Goulburn offer still hinges on approval from the Australian Competition Tribunal, which could take up to six months. It has previously had a bid for Warrnambool rejected by the ACCC because of competition concerns.
BGA VS WCB 1Y – New threat: bid inflation in dairy industry worsens as yet another higher bid for Warrnambool
Murray Goulburn is now playing the national champion card and appealing for government help in pushing this line.
CEO, Garry Helou repeated the argument in yesterday’s statement, saying; "a combined Murray Goulburn and WCB will create one of the largest Australian owned food and beverage businesses and a globally competitive dairy foods company 100 per cent controlled by dairy farmers."
In that statement to the ASX, Murray Goulburn argued that its fresh offer gave shareholders "demonstrably superior value" and despite the length wait from the tribunal was "simple and straight forward".
"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.
"The revised offer … delivers an Australian owned and operated company with the scale, capacity strength and momentum to capture global growth opportunities."
Murray Goulburn had previously offered $9 cash per share, while Bega has offered 1.5 of its shares and $2 cash.
"MG expects that the WCB board will engage expeditiously with MG to deliver a positive recommendation for MG’s revised offer," Murray Goulburn said in a statement, adding that it was $2.01 a share higher than the independent assessment WCB received from KPMG of a maximum of $7.49 (Didn’t the ‘expert ‘get it wrong!)
The higher offer came a day after Murray Goulburn protested to the Australian Takeovers Panel that Saputo had "misinformed" WCB shareholders.
Murray Goulburn says the decision by the Warrnambool board to abandon the two special payments, including one covering franking credits, when the Saputo offer was lifted to $9.20, is different to the one originally approved by the Warrnambool board.
The Takeovers Panel has yet to decide whether it will hold a hearing into Murray Goulburn’s complaint.
When Bega started the takeover battle for Warrnambool in September, the target’s shares were worth $4.51.
Warrnambool shares were at $9.32, up 2c. Bega shares were up 9c cents at $4.74. Bega’s offer is now worth $9.11 for Warrnambool shareholders.
The Warrnambool board was meeting late yesterday to discuss the new Murray Goulburn offer. It has consistently rejected the offers from Murray Goulburn and Bega.
