So will the Goodman Fielder (GFF) board fold and accept a lower price from its Asian suitors, or will the board stand firm and demand they honour the 70c a share offer?
That’s the situation after Goodman shares went into a trading halt yesterday.
The shares had closed at 68c last Friday. The halt was called well before trading started yesterday at 10am.
Its suitors, Asian agribusiness group Wilmar and Hong Kong-based investment management company First Pacific, completed four weeks of due diligence over the weekend and are supposedly due to sign a scheme of implementation agreement this week.
Wilmar and First Pacific are offering 70c a share, conditional on the completion of satisfactory due diligence.
But surprisingly the 70c a share price no longer seems to be on the table.
GFF 1Y – Goodman Fielder halts as offer price lowers
There’s market talk of a price cut to around 67c a share because due diligence uncovered weaker financials for Goodman Fielder that will require more capital to be spent on the business.
Wilmar and First Pacific originally offered 65c a share but agreed to lift their offer in May after securing the support of major shareholders Perpetual Investments and Ellerston Capital.
Now they want to renege on the 70c a share offer.
Market sources say the due diligence revealed nothing significant and there’s a feeling Wilmar and First Pacific are trying to take advantage of Goodman Fielder’s vulnerable position to save $40 million to $60 million off their $1.4 billion offer price.
Goodman shares, which were trading around 52c before the offer was announced a couple of months ago, will plunge if the bid is withdrawn.
