Warrnambool Cheese & Butter Factory Co. surged the most on record after a takeover bid from Bega Cheese Ltd. that valued the target at A$319 million ($295 million).
Shares gained 28 percent to close at a record A$5.77 in Sydney, the biggest gain since the company was listed in 2004. The stock has climbed 60 percent this year, compared with a 13 percent advance in the S&P/ASX 200 Index.
Bega will offer 1.2 shares and A$2 cash for each Warrnambool share, valuing the stock at A$5.78 apiece, the company said in a statement today. The offer is a 28 percent premium to yesterday’s closing price. Bega said it owns 18 percent of Warrnambool Cheese.
The merged company would produce 353,000 tons of dairy products and process about 1.6 billion liters of milk from Australian farmers, Bega Executive Chairman Barry Irvin said in a statement. Australia’s milk production totaled 9.2 billion liters in the 2012-2013 season, according to Dairy Australia.
Warrnambool said in a statement that it hasn’t had the opportunity to review the offer and isn’t yet in a position to make a formal recommendation to shareholders. The company’s directors will meet shortly to consider the bid, it said.