Bega denies WCB bid request

Suitor refuses to budge on performance rights condition despite target request.

Warrnambool Cheese and Butter Factory Company Holdings (WCB) intends to seek shareholder approval for the grant of extra performance rights to its chief executive officer, despite Bega Cheese's (WCB) takeover offer saying no performance rights are to be granted during the offer period.

In a statement to the Australian Securities Exchange, WCB said it plans to seek approval at its annual general meeting to grand additional performance rights to CEO David Lord, in accordance with its executive performance rights plan.

WCB said it requested Bega waive the condition that allows it to withdraw its offer if performance rights are granted or issued in the offer period, given the "relatively modest number" of performance rights, but Bega declined.

If the performance rights resolution is approved, WCB said it will not grant the rights unless it becomes reasonably certain that the Bega offer is unlikely to result in a takeover.

Bega has refused to concede defeat on its $347.8 million takeover offer, comprising $2 in cash plus 1.2 of its own shares for each WCB share.

WCB has entered a takeover bid implementation deed with Canadian dairy processor Saputo, which made an all cash off-market offer of $7 per share, valuing the target at $392.7 million. 

Murray Goulburn Co-operative Co Ltd last week made a higher bid, offering $7.50 cash per share, valuing the target at $420 million.

Bega could be set to offer a sweetened deal this week, The Australian reports.

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