Fonterra Cooperative Group Ltd., the world’s largest dairy exporter, is seeking as much as a 10 percent stake in Australia’s Bega Cheese Ltd. (BGA), according to a person with knowledge of the matter.
Goldman Sachs (GS) Group Inc. is approaching Bega shareholders on behalf of Fonterra and offering A$4.95 per share, said the person, asking not to be identified as the information is private. Bega, based in New South Wales state, closed today in Sydney at A$4.41, giving it a market value of A$670 million ($636 million). Its shares have gained 10 percent this week.
Bega, one of three bidders for Warrnambool Cheese & Butter Factory Co., won Australian regulatory approval today to proceed with its A$408 million offer for the dairy producer. Its cash and stock offer is below the A$8 per bid offer made last week by Montreal-based Saputo Inc. (SAP), which has support from Warrnambool’s board, and is also lower than a A$7.50 per share cash proposal from Murray Goulburn Cooperative Co.
Fonterra, which operates 10 manufacturing sites in Australia with 1.7 billion liters of annual milk production, this week hired Reunion Capital Partners’ Mike Everett to advise on “corporate activity in the dairy sector,” spokesman Carl Stephens said Oct. 29. Everett is a former Goldman Sachs head of equity capital markets in Australia.
Spokesmen for Fonterra, Goldman Sachs and Bega declined to comment or weren’t immediately available. The Australian Financial Review reported on Fonterra’s stake purchase earlier today.
Kirin Holdings Co. (2503), Japan’s largest beverage maker, bought a 9.99 percent stake in Warrnambool on Oct. 29. Kirin’s Australian unit Lion has a contract with Warrnambool to manufacture cheese for its Coon and Cracker Barrel brands.
Bega Cheese holds 18 percent of Warrnambool and Murray Goulburn owns 17 percent, according to data compiled by Bloomberg.
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