Bega bid 'highly opportunistic': WCB

Warrnambool Cheese & Butter urges shareholders to take no action, highlights growth potential as it reviews offer.

Warrnambool Cheese & Butter Factory (WCB) has labelled Bega Cheese's (BGA) takeover bid "highly opportunistic" and urged shareholders to take no action as it continues to mull the offer.

In a statement to the Australian Securities Exchange, the dairy producer said its "highly favourable" growth prospects had made it an attractive target.

The WCB board is currently review Bega's offer for 1.2 Bega shares plus $2.00 cash for every WCB share with the assistance of its legal and financial teams.

It highlighted an "improving product mix, higher margins and earnings diversification" as important factors as it continued to weigh up the bid.

"These initiatives, as well as an expected improvement in short to medium term fundamentals in global dairy markets, including a substantial weakening of the Australian dollar, provide a positive outlook for WCB’s future growth and profitability and will create significant value for shareholders," the company said.

"WCB directors will assess these factors as we consider whether Bega’s offer adequately reflects the value of the WCB business today, the expected future earnings uplift from the initiatives currently underway and the improving market conditions."

WCB said further recommendations would be outlined in its forthcoming target statement response to the offer.

Bega is part of the Uncapped 100.

InvestSMART FORUM: Come and meet the team

We're loading up the van and going on tour from April to June, with events on the NSW central & north coast, the QLD mid-north coast and in Perth, Adelaide, Melbourne, Sydney and Canberra. Come and meet the team and take home simple strategies that you can use to build an investment portfolio to weather any storm. Book your spot here.

Want access to our latest research and new buy ideas?

Start a free 15 day trial and gain access to our research, recommendations and market-beating model portfolios.

Sign up for free

Related Articles