Murray Goulburn Cooperative Co., the underbidder in a two-way tussle for Warrnambool Cheese & Butter Factory Co., plans to withdraw its offer for the Australian dairy producer and sell its holding to Saputo Inc.
Murray Goulburn will receive at least A$92.9 million ($82 million) for its 17.62 stake, it said today in a statement. The deal will give Saputo, Canada’s biggest milk processor, control of more than 75 percent of Warrnambool shares.
“These cash proceeds will support our plans to reinvest in our business and to grow our market share in Australia,” and expand overseas, Managing Director Gary Helou said in the statement.
Saputo will pay a maximum of A$9.60 a share in cash should it acquire more than 90 percent of Warrnambool, it said in a Jan. 22 statement. It will offer A$9.40 a share on securing more than 75 percent of the dairy producer, it said. The proposal values Warrnambool at a maximum of A$537 million.
Murray Goulburn, which has offered A$9.50 a share, will seek authorization to withdraw its bid from the Australian Securities and Investments Commission, it said in the statement.
Montreal-based Saputo holds 57.695 percent of Warrnambool, it said today in a separate statement. Victoria-state based Warrnambool rose 0.6 percent to A$9.475 in Sydney trading.
Warrnambool, the maker of Sungold milk and Great Ocean Road cheese, has more than doubled in market value since an initial bid by Bega Cheese Ltd. in September began a contest for the company with Saputo and Murray Goulburn. Bega withdrew its offer last month and agreed to sell its 18.8 percent stake to Saputo.
Buying Warrnambool gives Saputo export infrastructure and production capacity to meet rising demand for dairy products in Asia, where milk consumption is forecast to jump 27 percent between 2012 and 2020 to 14 billion liters in Southeast Asia’s six-largest economies, according to Rabobank.