UBS AG is bidding for as much as 10 percent of Goodman Fielder Ltd., Australia’s biggest baker, on behalf of an overseas buyer, the Australian Financial Review reported.
The investment bank is seeking to buy the shares at 60 Australian cents each, the newspaper said, citing unidentified people familiar with the matter. The stock rose 2 percent to 51.5 cents at the close today in Sydney, valuing Goodman at A$1 billion ($1.1 billion).
Goodman has slumped 56 percent in the past year compared with a 12 percent decline in the benchmark S&P/ASX 200 index. Chief Executive Officer Chris Delaney blamed the rising cost of basic food ingredients and a “very challenging retail environment” as he reported a 77 percent decline in first-half profit this month.
“It’s always going to be a challenged business,” said Stuart Jackson, an analyst at JPMorgan Chase & Co. in Sydney with a “neutral” rating on the stock. “The earnings are pretty bombed out at the moment.” A bid would come from “someone who thinks they can run it better,” he said.
Pacific Equity Partners, an Australian buyout firm, and Bain Capital in November 2005 withdrew a A$3.6 billion offer for Goodman after failing to agree on price.
Ian Greenshields, a Sydney-based spokesman for Goodman, declined to comment on the Review report. A UBS spokeswoman said she couldn’t immediately comment.