Open Country opens butter plant
When American retail giant Cosco came to audit Open Country Dairy’s new butter plant at the Waharoa site and give the green light to supply their American stores, they allowed themselves a week for the exercise.
In a shock revelation, the two parties made a joint announcement on October 8.
WCB managing director, David Lord, said the company recommended all shareholders accept Saputo’s offer of $7 a share, in the absence of a superior proposal.
“Saputo’s offer underscores the strategic value of WCB’s assets and vindicates the board’s decision to reject Bega’s inadequate, highly conditional offer,” Lord said.
“Saputo’s all cash offer provides greater certainty for WCB shareholders and a substantial premium for their WCB shares.”
Saputo is one of the top 10 dairy processors in the world. It is the largest dairy company in Canada, the third largest in Argentina and one of the three biggest cheese manufacturers in the US.
It exports products to 40 countries around the world and has sales of C$8.6 billion.
Saputo’s offer is subject to approval by the Foreign Investment Review Board and conditional on Saputo gaining at least 50.1% of WCB shares.
An application was lodged with the investment review board about September 10, but he had not yet received any feedback.
Lord said foreign investment in the Australian dairy industry in the past 50 years had provided the foundations for today’s industry.
“Kraft, Nestle, Fonterra – they’re three big international investors who came to this country and invested heavily in the dairy industry and grew it for the benefit of all the current participants,” Lord said.
“I think suppliers should be excited about this transaction and its potential.
“Saputo are planning to invest in this business. If we increase capacity and capability we need milk supply to support that.”
The Saputo bid will remain on the table until early December. Bega’s offer is slated to close on November 28.
