WARRNAMBOOL Cheese and Butter (WCB) has fired a broadside at Murray Goulburn Co-operative as it tries to stave off its rival's takeover attempt.
WCB yesterday shored up its defences with a letter to shareholders, refuting claims made by Murray Goulburn and highlighting key areas in which it financially outperforms the co-operative.
The letter followed WCB's earlier rejection of two takeover proposals from Murray Goulburn and the co-operative's subsequent purchase of WCB share bundles that now give it an 8.37 per cent stake.
The correspondence, posted on the Australian Securities Exchange (ASX) website yesterday, addressed a number of points made in a letter that Murray Goulburn sent to its own suppliers on February 23.
In that letter, Murray Goulburn chairman Grant Davies highlighted the co-operative's financial strength in an effort to bolster support for its takeover ambitions.
WCB chairman Frank Davis refuted Murray Goulburn's statement that the co-operative model was better for suppliers than a listed company structure.
"WCB has delivered both good returns to shareholders and a competitive milk price to suppliers," Mr Davis wrote.
The letter pointed out key areas of financial performance in which WCB outperformed Murray Goulburn across the 2000 to 2009 period.
These included sales revenue growth of 107 per cent compared to Murray Goulburn's 73 per cent, 117 per cent total asset growth compared to the co-operative's 78 per cent and a milk intake increase of 60 per cent compared to Murray Goulburn's four per cent.
Retained profits and reserves growth was 232 per cent for WCB and 96 per cent for Murray Goulburn and total equity growth was 127 per cent against 111 per cent.
Mr Davis said the letter was prompted by inquiries from WCB shareholders about comments made in Murray Goulburn's letter.
"The board considers it may be helpful to shareholders to put forward our own views of these matters," Mr Davis wrote.
Murray Goulburn declared its share purchases to the ASX on Thursday in a "Notice of change of interests of substantial shareholder". The notice declared that Murray Goulburn now owns 3.34 million of WCB's 40 million shares, up more than 500,000 since March 2.
The declared figures show that Murray Goulburn purchased the vast majority of shares traded during the last two weeks.
However, some days saw volumes of up to 15,000 shares not accounted for by Murray Goulburn’s purchases. Those days saw trading highs of up to $4.56, indicating that there are also speculators in the market.
Trading remained strong this week with daily volumes between 27,000 and 83,000 changing hands.
WCB shares closed yesterday at $4.51.
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