Bega Cheese will sell its 18.8 per stake in Warrnambool Cheese and Butter to Canadian dairy giant Saputo, putting Saputo in prime position to win the takeover battle for WCB.
Saputo and Australia’s Murray Goulburn dairy co-operative are vying to take over Warrnambool.
Earlier this week, Saputo held about 26.45 per cent of Warrnambool shares. The addition of Bega’s 18.8 per cent stake will give Saputo an interest of about 45.25 per cent.
Saputo’s takeover offer for Warrnambool, which is final, closes on January 22.
At 1530 AEDT on Thursday, Saputo was unable to say whether its bid had attracted sufficient acceptances to give it control of Warrnambool.
Bega had also made a takeover offer for Warrnambool but allowed its bid to lapse in December 2013.
Bega said on Thursday that it preferred Warrnambool to remain in Australian hands, but the Bega board was conscious of its obligation to its shareholders to make sensible investment and capital management decisions.
Bega said it would make a profit before tax and costs of $61.8 million to $68.2 million on the sale of its Warrnambool stake to Saputo.
“The significant profit realised by the sale of our Warrnambool holding will add to our capacity to pursue a number of strategic business opportunities,” Bega executive chairman Barry Irvin said in a statement.
Bega said it could not risk continuing to hold its Warrnambool stake until the Australian Competition Tribunal’s decision regarding Murray Goulburn’s takeover offer, or until a fourth bidder emerged.
Murray Goulburn’s offer is subject to no objection by the Australian Competition and Consumer Commission (ACCC) or the granting of authorisation by the tribunal.
The tribunal’s decision is not expected until late February at the earliest.
Murray Goulburn has a 17.7 per cent stake in Warrnambool.
Murray Goulburn on Thursday noted the acceptance of the Saputo offer by Bega Cheese.
“Murray Goulburn will assess the ramifications of this development as it relates to Murray Goulburn’s bid for Warrnambool and also Murray Goulburn’s 17.7 per cent shareholding in Warrnambool, and will continue to monitor the situation as it evolves,” Murray Goulburn said in a statement.
Saputo is offering an unconditional $9.00 per Warrnambool share, but that price could increase to as much as $9.60 if Saputo attains various share thresholds in Warrnambool at and above 50 per cent.
Murray Goulburn’s bid of $9.50 is conditional upon it obtaining more than 50 per cent of Warrnambool shares.
Shares in Warrnambool were 12 cents higher at $9.40 at 1532 AEDT. Bega was up three cents at $4.64.
