Bega bid better, says its boss
Bega boss Barry Irvin had a simple message to deliver as he hit the road to visit Warrnambool Cheese and Butter shareholders on Tuesday night.
He had no lollies in his pocket or other sweeteners to entice the shareholders of Australia's oldest listed milk processor to accept his company's bid.
Bega made its final offer to take over WCB on Thursday. It was unconditional at $2 cash plus 1.5 Bega shares, valuing the bid at a touch over $9 based on Tuesday's close.
Despite Murray Goulburn and Saputo offering $9 cash or $505 million, Mr Irvin said he was comfortable with Bega's bid.
He said it sent a message to WCB and Bega shareholders that the company's board was disciplined and was not "going to get dragged into an endless bidding war".
"We had in our minds the range we wanted to work in, the gearing that we wanted the company to have and the value creation ...
"For us, as with everything we do in our business, it was all about staying very disciplined in our approach. The bidding has been going on for quite a while now."
This was not a concession speech, but rather words aimed at invoking a steady hand and future prosperity - the essence of Mr Irvin's pitch to WCB shareholders at meetings in Warrnambool, Mount Gambier and Ballarat this week.
"Bega Cheese, Tatura Milk Industries - which we recently merged with - and WCB have very common histories, very common cultures and our ambition is to bring those businesses together to create a really strong Australian dairy company that can improve returns for both shareholders and suppliers," Mr Irvin said. "We still think that argument has a lot of merit.
"We will be putting our track record on the table around our capacity to buy businesses, integrate them and not only create value but add value to the community; build those businesses and invest in them."
This is despite WCB chief executive David Lord hinting that a merger with Bega or Murray Goulburn could lead to job losses.
Bega, which owns 18.3 per cent of WCB, believes it can squeeze an extra $7.5 million before tax out of Warrnambool in cost savings in the first year of ownership.
But Mr Irvin said that did not mean job cuts and he was disappointed it was portrayed as such.
"We will keep all the operating sites, the brand, the board, etc," Mr Irvin said. "Of course at very senior executive level there would be some rationalisation. But I'm disappointed that uncertainty would be put in the mind of the general employee population and the broader community.
"Not only were we very clear but our best example is in our acquisition of Tatura Milk Industries and our purchase of Kraft's Strathmerton site: We haven't only created more opportunities for staff, we have increased staff numbers and increased investment in the business. We weren't making the comments without foundation or as rhetoric. We can point to ... our track record."