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Saputo Gets Interim Regulator Block on Buying Warrnambool Shares

Australia’s Takeovers Panel made an interim order preventing Saputo Inc. (SAP), one of three bidders for Warrnambool Cheese & Butter Factory Co. (WCB), from processing acceptances for its offer.

Saputo “must not take any further steps to process any acceptances received under its bid for Warrnambool,” the panel said today in a statement. The order will be in effect until further notice for up to two months, it said.

Murray Goulburn Cooperative Co., Australia’s biggest milk processor, this week asked the regulator to block Canada’s Saputo from buying shares in Warrnambool after Saputo raised its offer and declared there would be no special dividend. Abandoning the dividend means the offer conflicts with previous announcements, Murray Goulburn submitted, the panel said Nov. 27. Murray Goulburn also submitted that the Warrnambool board should tell shareholders to wait until the bid is in its final stages or bidders have declared their bids final, it said.

“An interim order is designed to maintain the status quo until the panel can consider the application in detail,” it said according to the statement. “An interim order does not indicate that the panel has decided to conduct proceedings or necessarily indicate the merits of an application for a declaration of unacceptable circumstances.”

Murray Goulburn yesterday raised its takeover offer for Warrnambool to A$9.50 a share, valuing it at A$533 million ($485 million). That beat an offer of A$9.20 by Canada’s largest milk processor and a cash and share offer from Bega Cheese Ltd. (BGA) The board of Warrnambool, Australia’s oldest dairy producer, has recommended shareholders accept Saputo’s offer.

Warrnambool fell 0.8 percent to A$9.25 at the close of trading in Sydney. Saputo boosted its stake in the company to 9.6 percent from 4.8 percent, Warrnambool said today in a statement.

The three-way contest for 125-year-old Warrnambool, based near the town in Victoria that bears its name, has more than doubled its market value in the two months since Bega, its largest shareholder, made an initial offer. Bidders are pursuing greater scale to help them tap rising demand for dairy produce, including milk powder, in Asia’s emerging nations.

To contact the reporter on this story: Elisabeth Behrmann in Sydney at ebehrmann1@bloomberg.net

To contact the editor responsible for this story: Andrew Hobbs at ahobbs4@bloomberg.net

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