Canada’s Saputo to take over Australian dairy producer Warrnambool for A$392.7m

October 8, 2013 Leave a comment

Canada’s Saputo to take over Australian dairy producer Warrnambool

Mon, Oct 7 2013

SYDNEY (Reuters) – Saputo Inc (SAP.TO: Quote, Profile, Research, Stock Buzz), Canada’s largest dairy producer, will acquire Warrnambool Cheese and Butter Factory Company Holdings Ltd (WCB.AX: Quote,Profile, Research, Stock Buzz) in a deal valuing Australia’s oldest dairy processor at A$392.7 million ($370.10 million). Saputo, which operates in Canada, the United States and Argentina, has been looking at Australia as a platform to expand its global presence and tap growing demand in Asia’s emerging markets. Warrnambool, whose brands include the Sungold Milk range of fresh milk, supplies dairy products to both domestic and international customers.Saputo made an off-market offer of A$7.00 per share for Warrnambool in an all-cash deal, which the Warrnambool board had recommended shareholders to accept. That was well above a A$5.75 per share offer from majority owner Bega Cheese Ltd (BGA.AX: Quote, Profile, Research, Stock Buzz) in September.

“The board came to the view after careful consideration that the Saputo offer is far superior to the Bega bid in terms of both value and conditionality,” Warrnambool CEO David Lord told reporters in a media briefing on Tuesday. “It provides greater certainty and substantial premium to WCB shareholders.”

The offer represents a 57.0 percent premium to the one-month volume-weighted average price of Warrnambool shares before Bega’s offer was announced, the company said.

Warrnambool shares surged 11.8 percent to A$7.22 by 0200 GMT, touching an all-time high of A$7.29, after the takeover was announced.

“This is our dream of ultimately having an Australian platform,” Saputo CEO Lino A. Saputo, Jr. said in a media briefing. “We believe Australia has the ideal platform for us getting products into those emerging markets.”

The Canadian company currently has a sales office in China, and is selling dairy products into other Asian markets such as Japan, Taiwan and South Korea, out of its Argentina operations.

When asked if the company would look to make more acquisitions in Australia, Saputo said the appetite is there.

“We have an appetite to grow and most of that growth will come through acquisitions. And of course if there are other assets available for sale, we will be part of that process,” Saputo said.

“Our balance sheet is very clean, which provides us quite a bit of flexibility for other acquisitions,” he added. ($1 = 1.0611 Australian dollars)

 

Saputo Offers $366 Million for Warrnambool, Topping Bega’s Bid

By David Stringer – Oct 7, 2013

Saputo Inc. (SAP), Canada’s largest dairy processor, agreed to pay about C$378 million ($366 million) for Warrnambool Cheese and Butter Factory Co., bettering a rejected bid by Bega Cheese Ltd. (BGA)

Saputo offered A$7 cash a share for the maker of Sungold and Warrnambool cheddar, according to a statement from the Montreal-based company. The deal, recommended by Warrnambool’s board, is priced at 8.4 percent more than Warrnambool’s close of A$6.46 yesterday.

The Canadian company’s bid tops a cash and share offer for the Warrnambool that operates two dairy processing plants in southeasternAustralia by Bega Cheese, its largest shareholder.

Saputo is planning on “increasing existing capacity or building additional capacity,” as it seeks to tap rising demand for dairy products in Asia, Warrnambool Chairman Terry Richardson said in a separate statement.

To contact the reporter on this story: David Stringer in Melbourne at dstringer3@bloomberg.net

 

Dairy group Saputo lobs rival takeover bid for Warrnambool Cheese and Butter

JANE HARPER

HERALD SUN

OCTOBER 08, 2013 2:22PM

THE takeover battle for Warrnambool Cheese and Butter has ramped up as Canadian dairy group Saputo throws its hat into the ring.

The Warrnambool Cheese board has backed Saputo’s bid of $7 a share, labelling it a better deal than that offered by rival suitors Bega.

Directors of the takeover target last week urged shareholders to reject Bega’s offer of 1.2 of its shares plus $2 cash for each Warrnambool Cheese share, saying it was too low and did not adequately reflect the group’s prospects.

The board today said Saputo’s offer was a better deal for shareholders.

“The board unanimously recommends shareholders accept Saputo’s offer, in the absence of a superior proposal,” the company said today.

“Saputo’s offer is superior to Bega’s offer in terms of value and conditionality.

“Saputo has made strong commitments to WCB suppliers, employees and the retention of WCB’s corporate identity and brands.”

Warrnambool surged more than 10 per cent this morning and were trading at $7.22 about midday.

Filed under Macro Trends

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