Bega jumped as much as 12 percent, before trading 8.6 percent higher at A$4.79 at 10:17 a.m. local time. Fonterra, the world’s largest dairy exporter, said it paid A$4.95 a share for a 6 percent stake in New South Wales state-based Bega after the market closed yesterday.
The purchase raised the value of Bega’s cash and share offer for Warrnambool Cheese & Butter Factory Co. (WCB) to a peak of A$7.93, just 7 cents less than the current highest bid from Montreal-based Saputo Inc. (SAP) Murray Goulburn Cooperative Co. is also bidding for Warrnambool.
“There has recently been a lot of consolidation activity in the Australian dairy industry,” Fonterra Chief Executive Officer Theo Spierings said today in a statement. “It is important that Fonterra participates, and we have confidence in Bega and the strategy it is pursuing.”
Bega’s board is meeting next week to discuss raising its offer for Warrnambool after its proposal was cleared yesterday by the Australian Competition and Consumer Commission, Chairman Barry Irvin said in an interview yesterday. Bega had climbed 40 percent at the close of trading yesterday since it made a takeover bid on Sept. 12 for the maker of brands including Sungold milk.
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