Saputo Inc. Announces Takeover Offer for Australian Dairy Company Warrnambool
Cheese and Butter
Warrnambool Board Unanimously Recommends Acceptance
MONTREAL, QUEBEC -- (Marketwired) -- 10/07/13 -- Saputo Inc.
(TSX:SAP) today announced that it has agreed with Warrnambool Cheese
and Butter Factory Company Holdings Limited ("Warrnambool") to make
an all cash takeover offer of AU$7.00 per share for all the shares in
Warrnambool on issue at the end of the offer period (the "Offer").
The Offer has been unanimously recommended by the Board of
Warrnambool and all Warrnambool directors recommend that Warrnambool
shareholders accept the Offer, in the absence of a superior proposal.
Each Warrnambool director and executive intends to accept the Offer
for all of the Warrnambool shares they hold or otherwise control, in
the absence of a superior proposal.
Warrnambool is an Australian public company, listed on the Australian
Securities Exchange ("ASX"). Warrnambool is one of the largest milk
processors in Australia, operating two manufacturing sites in South
West Victoria and South Australia and employing over 420 people.
Warrnambool produces a range of dairy products for domestic and
export markets. Its products include cheese, butter and butter
blends, milk, cream and dairy ingredients. For the financial years
ended June 30, 2013 and 2012, Warrnambool's consolidated revenues
were CA$477 million(1) and CA$479 million, respectively, with
earnings before interest, tax, depreciation and amortisation (EBITDA)
of CA$25 million and CA$34 million, respectively. As publicly
disclosed by Warrnambool on October 2, 2013, EBITDA for the financial
year ending June 30, 2014 is expected to be in the range of CA$45
million to CA$50 million(2).
Based on the current issued share capital of Warrnambool, the
purchase price for 100% of the shares of Warrnambool would equal
approximately CA$378 million and will be funded out of Saputo's newly
committed bank loan with a three-year term. The enterprise value of
Warrnambool implied by the Offer is approximately CA$450 million,
based on CA$73 million of net debt as of June 30, 2013. Depending
upon Saputo reaching specified interest thresholds in Warrnambool, a
portion of the offer price of up to AU$1.31 per share may be payable
by Warrnambool through the distribution of special dividends to its
shareholders that could deliver additional value estimated by
Warrnambool to be up to an additional AU$0.56 per share to some
Warrnambool shareholders, depending upon the individual tax
circumstances of each Warrnambool shareholder.
The Offer is subject to a limited number of conditions (including
foreign investment approval and a minimum tender condition of greater
than 50%). The Offer is expected to close around early December 2013,
unless extended or changed as permitted by the Australian
Corporations Act. There can be no assurance that the Offer will be
successful, either in whole or in part. Warrnambool is also the
subject of a non-solicited takeover offer launched by an Australian
dairy company on September 12, 2013, which offer includes a
consideration of cash and shares at an implied offer price of AU$6.30
per Warrnambool share, calculated on the Australian bidder's share
price as at the close of trading on ASX on October 7, 2013.
Rabobank and Rothschild are acting as the financial advisors to
Saputo, while Maddocks and Stikeman Elliott LLP are acting as legal
counsel. National Bank of Canada and Bank of Montreal are co-lead
arrangers for the new bank loan.
CAUTION REGARDING FORWARD-LOOKING STATEMENTS
This news release contains forward-looking statements within the
meaning of securities laws. These statements are based, among other
things, on Saputo's assumptions, expectations, estimates, objectives,
plans and intentions as of the date hereof regarding the Offer, its
success, anticipated benefits, the number of shares that Saputo will
actually be able to purchase and any change to the Offer price or
Forward-looking statements are based on Management's current
estimates, expectations and assumptions, which Management believes
are reasonable as of the date hereof, and, accordingly, are subject
to changes after such date. You should not place undue importance on
forward-looking statements and should not rely upon this information
as of any other date.
Except as required under applicable securities legislation, Saputo
does not undertake to update or revise these forward-looking
statements, whether written or verbal, that may be made from time to
time by itself or on its behalf, whether as a result of new
information, future events or otherwise.
Saputo produces, markets, and distributes a wide array of dairy
products of the utmost quality, including cheese, fluid milk,
extended shelf-life milk and cream products, cultured products and
dairy ingredients. Saputo is one of the top ten dairy processors in
the world, the largest in Canada, the third largest in Argentina and
among the top three cheese producers in the United States. Our
products are sold in more than 40 countries under well-known brand
names such as Saputo, Alexis de Portneuf, Armstrong, Baxter,
Dairyland, Dragone, DuVillage 1860, Friendship, Frigo Cheese Heads,
Great Midwest, King's Choice, Kingsey, La Paulina, Milk2Go, Neilson,
Nutrilait, Ricrem, Salemville, Stella and Treasure Cave. Saputo Inc.
is a publicly traded company whose shares are listed on the Toronto
Stock Exchange under the symbol "SAP".
(1) All amounts in Canadian dollars are calculated using an exchange
rate of CA$1 = AU$1.04.
(2) Sourced from public filings by Warrnambool on the ASX
Media and Investor Relations
Director, Corporate Communications
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