Saputo Inc., Canada’s largest milk processor, raised its offer for Warrnambool Cheese & Butter Factory Co. to A$515 million ($472 million), beating two rival bids for Australia’s oldest dairy producer.
Saputo will pay A$9.20 cash a share, up from A$9 a share, on condition it gains more than 50 percent of Warrnambool, the Montreal-based company said today in a statement. The offer trumps a A$9 bid from Murray Goulburn Cooperative Co. and a cash and share offer from Bega Cheese Ltd.
The three-way contest for 125-year-old Warrnambool, based near the town in Victoria that bears its name, has more than doubled the target’s 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.
Saputo’s new offer was “simpler, more certain and potentially more valuable” than the previous one, which Warrnambool’s board of directors recommended to shareholders, the company said in a separate statement.
Warrnambool rose 2 percent to A$9.23 at the close of trading in Sydney.
Warrnambool, which recommended Saputo’s A$9 a share bid, will hold information sessions with shareholders and and suppliers this week, which will be attended by Saputo executives, the Australian company said today in a statement.
Bega holds 18 percent of Warrnambool, maker of brands such as Sungold milk and Great Ocean Road cheese, and Murray Goulburn owns 17 percent, according to data compiled by Bloomberg.
Bega’s stock closed at A$4.67 today, valuing its proposal at A$9.005 for each Warrnambool share it doesn’t own. owns 17 percent, according to data compiled by Bloomberg.
Japan’s Kirin Holdings Co. bought a 9.99 percent stake in Warrnambool last month, seeking to protect an arrangement under which the producer supplies at least 12,000 metric tons of cheddar each year for its Australian unit’s Coon and Cracker Barrel cheese brands. Fonterra Cooperative Group, the world’s largest dairy exporter, said Nov. 1 it had acquired a 6 percent stake in New South Wales state-based Bega.