Friday, November 21st0.3°C
24157
23719

Saputo gains majority control of Australia's oldest dairy processor

MONTREAL - Saputo has come out on top in a bidding war for Australia's oldest dairy processor by gaining majority control of Warrnambool Cheese & Butter, the company confirmed Tuesday.

The Montreal-based company wrote in a filing with the Australian Stock Exchange that it has secured a stake of 52.7 per cent in the dairy ahead of the Wednesday deadline for its offer.

Saputo gained control when Wilson Asset Management, which owns 1.15 per cent of Warrnambool, and other shareholders, agreed to sell their stakes, the Business Spectator website and the Australian Broadcasting Corp reported.

Saputo spokeswoman Sandy Vassiadis said the company is "happy" to have secured a majority of Warrnambool's shares.

The Canadian cheese giant has been eyeing Australia for a decade as it sought ways to extend its reach into the Asia-Pacific area and capitalize on growing global demand for dairy solids. The demand for milk powder used in baby formula, for example, has grown by 25 per cent annually since 2010.

The deadline for its offer has now been extended by 14 days to give more Warrnambool shareholders time to accept Saputo's offer, which could raise the price to as high as AU$9.60 from AU$9.20, if enough shareholders tender their shares.

Saputo's (TSX:SAP) offer of AU$9 per Warrnambool share rose to AU$9.20 after securing more than half of its stock. The bid rises to AU$9.40 per share if it gets 75 per cent of Warrnambool and AU$9.60 if it gets 90 per cent.

Saputo will pay between AU$503.7 million (C$486.3 million) and AU$537.3 million (C$518.8 million), depending on the result.

Warrnambool's shares closed Tuesday at AU$9.31 on the Australian Securities Exchange, suggesting investors expect Saputo to get a solid majority of WCB shares.

Montreal-based Saputo has been creeping towards the finish line after one-time rival Bega Cheese, Australia's fifth-largest dairy processor, last week agreed to tender its 18.8 per cent stake in the dairy.

The last official count put Saputo at 47.85 per cent.

Analyst Irene Nattel of RBC Capital Markets said Saputo's takeover of WCB now is "virtually assured" and positive for the Canadian cheese producer.

"The proposed acquisition is highly strategic and would provide SAP with an important platform to capitalize on global growth in emerging markets," she wrote in a report.

One of the remaining questions is how large Saputo's stake will be.

"The wild card in the process remains (rival bidder) Murray Goulburn," Nattel said.

Murray Goulburn, the co-operative that runs Australia's largest dairy processor, controls 17.7 per cent of Warrnambool and has bid US$9.50 contingent on winning competition tribunal support.

"Given the uncertainty of approval by the Australian Competition Tribunal, we would expect Murray Goulburn to tender to Saputo while simultaneously expressing its disappointment and pointing to the windfall profit it will realize on its stake," Nattel said.

The competition tribunal said Monday that it would proceed with its inquiry into Murray Goulburn's bid, set to begin Feb. 10, even if Saputo secured more than half of Warrnambool.

Kirin Holdings also owns about 10 per cent of Warrnambool through its Lion unit in Australia.

Warrnambool is seen as a potential toe hold in the Asia-Pacific region for Canada's largest cheese and dairy company, which also has a major presence in the United States and operations in South America.

Australia is the world's third-largest exporter of milk products after the European Union and New Zealand, with about 10 per cent of the global market share.

On the Toronto Stock Exchange, Saputo's shares closed down one cent to C$52.54 in Tuesday trading.

The Canadian Press


Read more Business News

22364


Recent Trending




Today's Market
S&P TSX15111.13+35.95
S&P CDNX789.135.56
DJIA17810.0691.06
Nasdaq4712.97+11.102
S&P 5002063.50+10.75
CDN Dollar0.8901-0.0002
Gold1201.50+10.60
Oil76.72+0.87
Lumber331.50+4.50
Natural Gas4.236-0.253

 
Okanagan Companies
Pacific Safety0.155-0.005
Knighthawk0.01-0.005
QHR Technologies Inc1.30+0.03
Cantex0.04+0.005
Anavex Life Sciences0.178+0.008
Metalex Ventures0.03+0.005
Russel Metals31.62+0.82
Copper Mountain Mining2.24+0.06
Colorado Resources0.125-0.015
ReliaBrand Inc0.013-0.002
Sunrise Resources Ltd0.050.00
Mission Ready Services0.35+0.015

 
23744


22899

FEATURED Property
1337928305-1229 Bernard Ave.
2 bedrooms 2 baths
$196,900
more details
image2image2image2
Click here to feature your property
Please wait... loading


What I learned in China: Part 2

As per my previous article on my visit to China, we have much to learn about and from their people. It is potentially the largest market on earth with 1.3 billion people in one country but much will d...


Retirement: Health Issues

Our health is really our greatest asset and maintaining our health is of tremendous importance. You want to do what you can to ensure that health issues will not jeopardize the enjoyment of your retir...


Be quiet already!

No, you’re not crazy. There really are voices in your head. Voices that keep you from doing what you need to do during your customer care calls. It can be the voice of your teachers, your parent...

_



22911

24158


Member of BC Press Council


24043