Saputo lifts WCB bid after Takeover Panel concern

CANADIAN dairy company Saputo has increased its offer to Warrnambool Cheese and Butter (WCB) shareholders after the Takeovers Panel found its earlier bid was “problematic”.

Shareholders accepting Saputo’s offer will now receive from $9 to $9.60, depending on the percentage of the share register that the company acquires.

The modified bid is final and offers $9 per share if Saputo gains up to 50 per cent of the register, $9.20 if it gets above 50 per cent, $9.40 if it reaches 75 per cent and $9.60 if it gets above 90 per cent.

The offer period, which was due to end on Friday, has been extended to 7pm on January 10.

“The announcement put into place arrangements that were complex, created uncertainly and were most undesirable. The panel would not want to see similar arrangements in future.”

By agreeing to make the modified offer Saputo averted the panel making a finding of “unacceptable circumstances” which would have scuttled its bid.

The Takeovers Panel became involved following an application from rival bidder Murray Goulburn asking it to look into aspects of Saputo’s bid.

The application was triggered by Saputo making an offer of $9 per share plus an extra 20 cents if it gained more than 50 per cent of the WCB share register. 

Murray Goulburn contended that this offer was worth less than an earlier bid that involved complex share dividend payments and therefore breached “truth in takeover” requirements.

The panel put Saputo’s offer on hold while it investigated.

The panel yesterday gave Saputo and WCB a rap across the knuckles for allowing the earlier bid to be offered.

“The announcement put into place arrangements that were complex, created uncertainly and were most undesirable. The panel would not want to see similar arrangements in future,” panel counsel Alan Shaw wrote.

In its finding, the panel said Saputo’s offer “departed from the previous statements to which the parties were bound”.

“However, the structure as announced was essentially unworkable.”

Mr Shaw wrote that the panel was “minded to make a declaration of unacceptable circumstances” but decided public interest was best served by allowing the bid to continue providing Saputo and WCB accepted certain undertakings.

These included an increased offer, an extension of the offer period and allowing shareholders to withdraw shares offered under earlier bids.

WCB was also required to spell out the status of all three takeover offers that are on the table.

A Saputo spokesperson described the revised bid as “a well-constructed final offer that is designed to reach a final resolution around WCB”.

On Monday Saputo had received acceptances that would give it 16.9 per cent of the register if none are withdrawn.

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