Bega Cheese seems to have a taste for deals – since the start of last year it has spent more than $700 million establishing itself in food businesses outside dairying, as well as going deeper into its core sector.
It has also raised $200 million selling two of its processing plants to raise funds to finance its biggest deal, the acquisition of Mondelez’s Australian food arm.
Yesterday it revealed itself as the stalker of the about to go private Capilano Honey and in doing so, raised the prospect of a bidding war for the ASX-listed honey firm.
Bega’s announcement of a substantial stake in Capilano also came as bad publicity erupted about the quality of some cheaper honey products, some of which are made and sold by Capilano.
Capilano was forced to defend the quality of its product amid reports the Allowrie-branded Mixed Blossom Honey it packages contained substances other than honey.
Bega revealed it has been buying Capilano shares since May 22 and paid $5.38 million for 255,291 Capilano shares on Friday, at an average of $21.08 per security, taking its stake in the company to 5.76% (and above the 5% compulsory notification level).
Bega’s purchase make sit the second largest shareholder in Capilano, which last month said it had received a bid from Australian-Chinese private equity fund Wattle Hill.
In January 2017, Bega paid $460 million to buy most of Mondelez International’s Australia and New Zealand grocery and cheese business – including the iconic Vegemite brand.
Earlier this year it bought the Peanut Company of Australia for $12 million and last month completed the $250 million acquisition of Saputo’s Koroit milk-drying facility in western Victoria – as well as guaranteed milk supplies for two years.
In march 2017 it sold two plants to US group, Mean Johnson for $200 million to help finance the Mondelez deal, as well as raising.
Bega raised $172 million from shareholders in an issue (at $5.35 a share) last June to help improve its balance sheet in the wake of the Mondelez deal.
Capilano shares were 1% up $21./19 Monday, while Bega Cheese shares were down 3% at one stage before partially retracing to end the day on $7.69, off 1.8%.
