CORRECTING AND UPDATING : Murray Goulburn (MG) has said Canadian dairy giant Saputo still has to buy its Koroit plant even though the Australian Consumer and Competition Commission (ACCC) has concerns the purchase might reduce competition for milk from south-west dairy farmers.
A MG spokesman said the terms of its $1.31 billion proposed sale to Saputo, which included the Koroit plant, had not changed and it would be up to Saputo to divest itself of the Koroit plant after its purchase to meet any concerns by the ACCC.
“The transaction remains as is,” the spokesman said.
His clarification corrects an earlier interpretation of MG’s statement on Tuesday to the Australian Securities Exchange that MG was seeking the same $1.31 billion price tag from Saputo for MG without the Koroit plant being included in the sale.
EARLIER: Murray Goulburn (MG) has raised the ante in its proposed sale to Saputo by seeking the same $1.3 billion price tag for the cooperative without its Koroit plant, the cooperative’s largest plant.
The move follows the news that Saputo is seeking to exclude the Koroit plant from its proposal to buy the rest of MG after the Australian Competition and Consumer Commission’s (ACCC) expressed concern that a Saputo purchase of the Koroit plant could reduce competition for milk in south-west Victoria and south-east South Australia.
In a statement to the Australian Securities Exchange (ASX) on Tuesday, MG said “the proposed divestment of the Koroit dairy plant by Saputo does not have any impact on the terms of the Asset Sale, including the consideration to be received by MG from Saputo and Saputo’s previously announced milk supply commitments.”
“There is no change to the acquisition price of approximately $1.31 billion to be paid by Saputo,” MG said.
MG said that since its sale was also subject to a vote by MG’s shareholders as well as ACCC clearance, it intended to issue an Explanatory Memorandum and Notice of Meeting on March 14 to convene an Extraordinary General Meeting (EGM) in Melbourne on Thursday, April 5.
“The directors intend to convene the EGM on the basis that the ACCC will accept the divestment proposal provided by Saputo and that ACCC clearance will be granted prior to the scheduled EGM date,” MG said.
“If clearance from the ACCC has not been granted by the business day immediately prior to the scheduled EGM date, MG expects to postpone the EGM.
“Until clearance is received, the transaction will remain conditional on ACCC approval,” the MG statement said.
The ACCC has invited further submissions by March 13 from interested parties in response to its concerns about the potential loss of competition if Saputo acquires MG’s Koroit plant.
The ACCC’s final decision is due on March 29.
In Tuesday’s statement to the ASX, MG also advised its estimate of the net value that shareholders and unit holders could receive from its sale over time had been increased.
The revision in estimated net value per share/unit reflected MG’s expectation of lower debt levels at the completion of the asset sale, MG said.
“This is a result of lower capital expenditure given the reduction in MG’s milk intake and improved outcomes against previous assumptions for the sale of its Edith Creek plant (in Tasmania),” the MG statement said.
MG has also reduced its estimated operating costs for MG post completion.