CANADIAN firm Saputo has increased its potential holding in Warrnambool Cheese and Butter (WCB) to 13.6 per cent.
The company announced the increase to the Australian Securities Exchange yesterday following more acceptances of its takeover offer for the Allansford-based WCB. It now has acceptances totalling 7.59 million shares.
Whether or not Saputo will be able to accept the offered shares is now subject to an interim order from the Takeovers Panel, requiring Saputo to cease processing acceptances until aspects of its offer are investigated.
The order followed a submission to the panel by rival bidder Murray Goulburn requesting investigation of certain aspects of the Canadian company’s offer.
The interim order was issued on Friday.
Meanwhile, Murray Goulburn has argued that farmgate milk prices would increase if it gained control of WCB.
In its submission to the Australian Competition Tribunal, made public on Tuesday night, the co-operative argued that the addition of WCB’s 800 million litre milk pool would reduce costs through economies of scale, diversification of production and the production of more high-value ingredients.
Murray Goulburn needs to convince the tribunal that its proposed merger will yield public benefits that outweigh concerns about reduced competition.
The merger would “not generate any meaningful reduction in the market for the acquisition of raw milk”, the co-operative argued in its submission.
The co-operative also said substantial synergies could be realised in areas such as transport and logistics.
It claimed these benefits would flow directly to farmers through stronger milk prices and argued the merger would allow the combined group to replace dairy imports into Australia with its own products.
The application is listed for initial hearing on Monday.
. Steve Hynes is a WCB shareholder.