Two rival bidders – Bega Cheese and Murray Goulburn – have offloaded their 19% and 18% respective stakes to Saputo after several months of bids and counter bids.
This means Saputo now holds at least 75% of the Victorian dairy company’s stock, meaning its offer price will increase to $A9.40 per share.
Saputo had offered an unconditional $A9.00 per WCB share, with the offer price rising if certain share thresholds were met. The offer price rose to $A9.20 when Saputo’s stake passed 50.1%, to $A9.40 at more than 75%, and will go up to $A9.60 when it passes 90%.
Murray Goulburn, Australia’s largest dairy processor, will receive at least $A92.9 million in cash proceeds after selling its 17.7% stake in WCB, with a $A51 million gain on investment before tax and costs. Bega will make a profit of $A68m on its sale of WCB shares.
Murray Goulburn has also withdrawn its application to the Australian Competition Tribunal (ACT) to have its bid for WCB authorised on the grounds that a takeover of WCB by Murray Goulburn would be of benefit to the public.
MG’s managing director Gary Helou says it is disappointed at missing out on WCB.
“(But) we are pleased our involvement in the bidding process drove a genuine auction and that all WCB shareholders have benefited as a result, including MG’s 17.7% stake,” says Helou.
The sale of our WCB shareholding represents an excellent financial outcome for the cooperative, he says.
“These cash proceeds will support our plans to reinvest in our business and to grow market share in Australia and expand internationally, further assisting us to deliver our goal of increasing the underlying farmgate returns.
“Throughout this process MG remained committed to acquiring WCB and we were confident we had a compelling case to obtain authorisation from the ACT. However in light of Saputo acquiring a controlling interest in WCB we have an obligation to our cooperative shareholders to maximise the financial outcome and focus management time on growing a strong and globally competitive cooperative.”
One of the top ten dairy processors in the world, Saputo is the largest in Canada, the third-largest in Argentina and among the top three cheese producers in the US.
Its products are sold in 40 countries. Saputo shares are listed on the Toronto Stock Exchange.
Australian listed processor Warrnambool produces dairy products for domestic and export markets. Its products include cheese, butter and butter blends, milk, cream and dairy ingredients.
Warrnambool operates two factories and has 420 employees.
