Bega to Consider Warrnambool Holding After Takeover Bid Closes

Bega Cheese Ltd. (BGA), the largest shareholder in Warrnambool Cheese & Butter Factory Co. (WCB), won’t extend its takeover offer in a three-way tussle for the Australian producer and will instead consider options for its stake.

The New South Wales-state based producer will close its takeover offer for Warrnambool, Australia’s oldest dairy producer, on Dec. 20, the company said today in a statement.

The contest for the maker of brands including Sungold milk and Great Ocean Road cheese has more than doubled Warrnambool’s market value in the two months since Bega’s initial bid of 1.2 shares and A$2. Bega’s offer was trumped by bids from Canada’s Saputo Inc. and Murray Goulburn Cooperative Co.

“Their preference may be for Warrnambool to remain an Australian asset and they would want to be a part of that, whether that’s with Murray Goulburn or another Australian interest,” Paul Jensz, a Melbourne-based analyst with PAC Partners said today by phone.

Saputo (SAP) offered to pay a maximum A$9.60 cash a share, which Warrnambool said values the company at A$537 million ($479 million), and Murray Goulburn bid a A$9.50 offer. Warrnambool shares declined 0.8 percent to A$9.20 at 2:20 p.m. Sydney time.

“Bega Cheese is pleased its takeover offer for WCB has facilitated the competitive takeover process and created significant value for,” shareholders, the company said in its statement.

Saputo will pay a maximum A$9.60 cash a share on condition it gains more than 90 percent of Warrnambool, the Montreal-based company said Dec. 17 in a statement. It had previously offered A$9 a share rising to a maximum of A$9.20.

Bega holds 18 percent of Warrnambool, while Saputo and Murray Goulburn both hold 17 percent, according to data compiled by Bloomberg. The bidders are seeking to raise production and add export infrastructure amid rising Asian demand.

To contact the reporter on this story: David Stringer in Melbourne at dstringer3@bloomberg.net

To contact the editor responsible for this story: Jason Rogers at jrogers73@bloomberg.net

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