Bega mans the phones

The cheese maker is calling Warrnambool shareholders as speculation mounts of a higher Saputo offer.

Bega Cheese Ltd is frantically calling Warrnambool Cheese & Butter Holdings Ltd  shareholders, trying to convince as many as possible to accept its takeover offer for the Victorian dairy company.

Bega will try and call each of Warrnambool’s shareholders through the weekend amid expectations Canadian rival Saputo Inc will boost its offer above Murray Goulburn Co-operative Ltd’s current $9 cash offer, the highest bid for Warrnambool among three.

“Every single share Bega gets is one frog’s leg closer to the French Canadians getting on their plane and winging it back to Quebec,” says Kidder Williams Ltd’s David Williams, Bega’s investment banking advisor.

Barry Irvin, Bega’s chairman, will visit western Victoria next week to personally appeal to Warrnambool shareholders to accept Bega’s offer.

The New South Wales cheese maker is offering 1.5 shares and $2 cash to Warrnambool shareholders. At 1225 AEST that bid was worth $8.855, superior to Saputo’s $8 cash offer but less than Murray Goulburn’s sweetened bid.

Bega, which has an 18 per cent stake in Warrnambool, said in an ASX statement it has received 22,393 shares or 20 acceptances for its Warrnambool takeover offer.

Warrnambool shares are currently in a trading halt. Yesterday the stock closed at $9.10.

Saputo is expected to not only trump Murray Goulburn’s bid but also to make it unconditional. Previously Saputo’s offer was conditional on 50.1 per cent of Warrnambool shareholders accepting it.

Bega, Murray Goulburn and Kirin Holdings Inc together have 46 per cent of Warrnambool’s shares, making Saputo’s conditional offer unlikely to succeed.  

Murray Goulburn’s is conditional on it gaining approval from regulators. That may be unlikely as regulators have indicated they want three major buyers of milk in western Victoria and eastern South Australia, not two.

Warrnambool, Murray Goulburn and Fonterra, which has a six per cent stake in Bega, are the area’s major milk buyers.