SHARES in Warrnambool Cheese and Butter (WCB) hit $9.53 yesterday, exceeding the level paid by Saputo when it took control of the company.
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The Canadian processor paid $9.40 per share to secure 87.5 per cent of the register.
The lift followed a few forays to $9.25 in the past two weeks.
Yesterday’s rise coincided with the completion of WCB’s purchase of Lion’s consumer cheese business. Lion agreed in March to sell its cheese brands to WCB, which has manufactured them under contract at Allansford. The $137.5 million transaction was completed yesterday.
Announcing the finalisation of the sale to the Australian Securities Exchange, WCB secretary Paul Moloney said the purchase was debt-free.
The purchase includes the Cracker Barrel, Coon, Mil Lel and Fred Walker brands, as well as cutting, wrapping and distribution infrastructure.
The cut and wrap facilities are located in a building adjacent to the Allansford factory.
The transaction enables WCB to increase its presence in branded cheese products.
Despite selling its cheese brands to WCB, Lion has retained its 10 per cent holding in the company, preventing Saputo from delisting the company from the stock exchange.
To do so Saputo would need to gain more than 90 per cent of shares. Lion has retained this investment despite the WCB board not paying a dividend last year or this year, ploughing the money back into the company instead.
Only a handful of shares — about 2.5 per cent of the register — are available for trading.
WCB has made $34.3m profit after tax in the first nine months of this fiscal year, $13m more than in the whole of last season.