Saputo Raises Warrnambool Bid to A$537 Million in Dairy Fight

Saputo Inc., Canada’s biggest milk processor, raised its bid for Warrnambool Cheese & Butter Factory Co. to A$537 million ($480 million), after a ruling from Australia’s takeover regulator.

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 today in a statement. It had previously offered A$9 a share rising to a maximum of A$9.20. The offer trumps a A$9.50 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 its market value since Bega, its largest shareholder, made an initial bid on Sept. 12. Bidders are seeking to increase production and add export infrastructure to help them tap rising demand for dairy produce in Asia.

“These increases will be available to all shareholders regardless of when they accept, including those who have already accepted the Saputo offer,” the Canadian processor said today in a statement.

Saputo won’t increase its bid again before its offer closes on Jan 10., it said as it extended from Dec. 20 the deadline for shareholders to accept the proposal. Warrnambool rose 2 cents to close at A$9.27.

Shareholders will get A$9.40 a share if Saputo obtains more than 75 percent of Warrnambool shares, the Canadian company said in the statement. It reiterated a previous proposal to pay A$9.20 per share on taking greater than 50 percent of the Australian producer’s shares.

Orders Lifted

Saputo holds 17 percent of Warrnambool, while Bega has 18 percent and Murray Goulburn holds 17 percent, according to data compiled by Bloomberg.

Australia’s Takeovers Panel lifted orders preventing Saputo from processing shareholder acceptances after it made undertakings to amend its proposals, the regulator said today in a statement.

Murray Goulburn, Australia’s biggest milk processor, had asked the regulator to intervene over Saputo’s revised Nov. 25. offer, under which Warrnambool dropped plans to pay shareholders special dividends linked to the deal.

That proposal had “put into place arrangements that were complex, created uncertainty and were most undesirable,” the panel said in its statement.

Warrnambool’s board has recommended Saputo’s offer to shareholders.