Saputo falls just short of WCB full ownership

SAPUTO’S offer to Warrnambool Cheese and Butter (WCB) shareholders closed on Wednesday evening with the company holding insufficient shares to take it to full ownership.

The offer period closed with the Canadian company holding 87.9 per cent of the share register. 

As widely anticipated, Japanese-owned Lion did not accept the offer for its 10 per cent holding, bought in the midst of a three-way bidding war for WCB.

Saputo needed Lion’s holding to take it above the 90 per cent threshold required to trigger compulsory acquisition of the remaining shares and delisting of WCB.

Lion depends on WCB to supply its consumer cheese brands and bought its holding to protect the contracts.

“At this stage Saputo expects that Warrnambool will remain listed on ASX, unless and until Warrnambool no longer meets criteria for listing,” Saputo said in a statement to the Australian Securities Exchange yesterday.

WCB’s listing on the ASX will be reviewed if the spread of investment ceases to meet listing requirements.

The ASX considers the requirement to be satisfied if there are at least 300 shareholders, each holding at least $500 of securities.

At present there are sufficient shares remaining outside the hands of the two main shareholders to satisfy this criteria, but the number of investors holding those shares is not available to the public.

With the offer now closed, shareholders who have accepted Saputo’s offer of $9.40 per share will be denied the extra 20 cents that would have been paid on exceeding the 90 per cent mark.

The closure of Saputo’s offer knocked the steam out of the WCB share price. 

Trading on the stockmarket dipped to $8.38 yesterday before closing the day at $8.74, down from $9.42 at the start of the week.

Meanwhile, Bega Cheese, which started the bidding war in September, is enjoying strong support in stock exchange trading.

Bega’s share price hit a record $5.07 at yesterday’s close of trading, exceeding the $5.05 reached in November at the height of the takeover battle.

In August, before the takeover race started, Bega shares traded down to $2.76.

Bega withdrew from the race in the face of stronger offers from Saputo and Murray Goulburn. It accepted Saputo’s offer and pocketed about $65 million profit thanks to the soaring share price. 

Bega executive chairman Barry Irvin said the cash opened up several avenues for expansion.

Bega owns two factories in its NSW home town, Tatura Milk Industries in the Goulburn Valley and a plant in Coburg.

It is keen to increase its presence in the south-west.

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