MURRAY Goulburn’s application to the Australian Competition Tribunal on its takeover bid for Warrnambool Cheese and Butter (WCB) hints strongly at job losses in several areas.
The co-operative lodged its application with the tribunal last Friday, seeking approval for its proposed takeover of the Allansford processor.
A restricted version of the document with confidential detail blanked out was made public on Tuesday.
While the detail is not available, the document’s headings leave little doubt that jobs will go. The clearest hints lie in the headings “reduction of head count”, “sharing management and services” and “consolidation of production at certain plants”.
Transport is identified as another area of savings. “There will be substantial savings flowing from improved efficiency in the transport operations,” the submission says.
Murray Goulburn has offered $9.50 per share to take over WCB and the proposal is still being assessed by the WCB board, with a view to making a recommendation to shareholders to either accept or reject the offer.
The board says a lack of supplied detail is frustrating its assessment of the offer and yesterday aired its concern in a letter to the Australian Securities Exchange.
“No supporting materials …have been publicly released and are therefore not yet available for review,” the company wrote.
“… evaluating the merits or otherwise of MG’s application and supporting materials is of central importance to WCB and its shareholders in assessing the likelihood that MG’s offer will become unconditional and be capable of completing.”
The application to the tribunal will make or break Murray Goulburn’s takeover attempt. It has to convince the tribunal that the public benefits of the merger would outweigh any possible reduction in competition for milk in the region.
Murray Goulburn chose to take its case to the tribunal rather than the Australian Competition and Consumer Commission (ACCC) because the tribunal considers a broad range of issues, not just the competition aspect. The ACCC can make its own submissions to the tribunal on the case.
“We believe the merger would bring considerable public benefits and that we have a better chance of success through the competition tribunal,” Murray Goulburn managing director Gary Helou told a shareholder meeting in Warrnambool last week.
The tribunal has provisionally named February 10 for the start of the hearing.
WCB has advised shareholders not to sell their shares until it has assessed Murray Goulburn’s offer. It had earlier recommended an offer by Canadian company Saputo, but this recommendation is on hold while aspects of the offer are considered by the Takeovers Panel.