Saputo holds firm, MG ponders lifting WCB stake

SAPUTO’S declared stake in Warrnambool Cheese and Butter (WCB) remains at 17.9 per cent, three days out from the close of its takeover offer.

The Canadian company’s most recent declaration to the Australian Securities Exchange (ASX) was made on December 24, announcing an increase from 16.9 to 17.9 per cent holding.

Declarations are required every time an individual holding increases by 1 per cent.

Saputo’s off-market offer will close at 7pm Friday unless the company exercises its right to extend the period.

However, a company contact said a further extension was unlikely.

Meanwhile, rival bidder Murray Goulburn, which holds a declared stake of 17.7 per cent, has announced to the ASX that it may buy shares on-market up to the allowed threshold of 19.9 per cent.

“Murray Goulburn is entitled to acquire WCB shares on-market, up to an ownership level of 19.9 per cent at prices up to $9.50 cash per WCB share, and reserves the right to do so without further notice,” the company said in a document posted on the ASX website.

Exercising this option would allow Murray Goulburn to move 2.2 per cent closer to its target of 50 per cent, independently of its off-market bid. 

Murray Goulburn’s off-market offering of $9.50 per share has yet to gain regulatory clearance from the Australian Competition Tribunal, although the offer is open for acceptance by shareholders on condition of gaining clearance.

WCB continues to recommend that shareholders reject Murray Goulburn’s bid and yesterday issued its target’s statement outlining the reasons behind its stance. 

The statement was also submitted to the Australian Consumer and Competition Commission, which can make recommendations to the Australian Competition Tribunal based on submissions received.

WCB’s statement details a number of concerns about Murray Goulburn’s bid, including issues surrounding its funding.

Trading in WCB shares has been lively this week, with 280,000 shares, or 0.5 per cent of the register, changing hands on Monday at between $9.23 and $9.26.

Yesterday’s trading saw 109,000 shares change hands for between $9.20 and $9.23 before the market closed at $9.20.

The unknown in the takeover chase is now Bega Cheese, which is out of the race and holding almost 18 per cent of the register.

While Bega failed in its takeover bid it stands to profit handsomely from the bidding war that it started in September.

Bega’s holding, mostly acquired more than two years ago, has cost it about $35 million and it is now worth $95 million should it sell to either of the remaining bidders.

Saputo is known to have approached Bega, while a Chinese investment company is also rumoured to be interested in buying its stake.

Bega shares have remained buoyant, with 321,000 traded yesterday for up to $4.52.


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