WCB sale creates instant millionaires

SAPUTO’S successful bid to take control of Warrnambool Cheese and Butter (WCB) has created a crop of instant millionaires.

At least nine major non-corporate shareholders have gained more than $1 million following the Canadian corporation’s move on the Allansford-based processor.

Saputo passed the 75 per cent shareholding benchmark this week, following Murray Goulburn’s sale of its 17.7 per cent stake on Wednesday.

The move bumps up the Saputo deal from $9.20 to $9.40 a share. 

Warrnambool’s Gall family is the biggest non-corporate beneficiaries with a $25.76 million payout and former WCB director John Gall is the largest individual shareholder with a nearly $6 million slice of the pie.

Mr Gall told The Standard he expected most people to use the flood of cash wisely.

The former WCB director said the payouts have arrived at a good time for many suppliers, coming after one of the region’s worst season’s ever.

Many farmers were forced into debt to keep herds fed during the dry summer and autumn, at the very time when milk payments were very low.

“Those who were wise enough to accumulate a substantial holding will also be wise enough to spend the money wisely,” Mr Gall said.

“I don’t think we will be seeing anything silly.”

Other winners from the WCB-Saputo deal include the Allansford factory’s general manager Bernard Kavanagh.

Mr Kavanagh has worked for Warrnambool Cheese and Butter for more than three decades and accumulated 596,809 shares, bringing his payout to $5.61 million.

Several major shareholders include J&K McKinnon with 709,636 shares totalling $6.67 million, J&H Renyard with 545,278 shares totalling $5.13 million and Phillip Anders with 265,149 shares totalling $2.49 million.

Former WCB chief executive John McLean had 233,684 shares in the company he helped to make a nationwide brand and has enjoyed a $2.20 million payout.

His successor David Lord has already collected $90,000 for his 10,000 company shares.

But due to the Saputo takeover automatically triggering the vesting of the 129,000 performance rights he also holds, the WCB chief executive is set to make an extra $1.2 million now the Montreal-based company has past the 75 per cent acquisition mark.

WCB chairman Terry Richardson takes away just $6279 from the deal as the Colac region farmer only owns 668 shares in the company.

While many local businesses will be hoping to see the cash flow their way, Mr Gall said he also expected charities to receive some of the windfall.

Mr Gall and his family held 2.74 million shares and together collected $25.76 million from Saputo’s takeover.

He explained that his family accumulated the shares by taking advantage of WCB’s original capital raising offer 14 years ago when WCB was trying to buy out of a joint venture with Bonlac.

“Every supplier was offered 37,000 shares for 25 cents per share,” Mr Gall said

“There was a figure that the company wanted to raise. 

“Those who took up the 37,000 shares were offered more, and that was repeated until the target was reached.”

The Gall family operated as six individual supplier entities and was able to take up the offer under each. “We invested $700,000,” he said yesterday.

Mr Gall’s individual holding was 635,999 shares, giving him a payout of $5.98 million from the takeover.

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