Bega set to exit battle for WCB
Bega Cheese began the battle for Warrnambool Cheese & Butter, but three months on it appears be the first casualty of the bidding war.
The company issued a statement to the ASX on Wednesday saying it would not extend its offer for the milk processor.
Bega has secured only a handful of acceptances since it made its bid in September, sparking a three-way bidding war with Canada's Saputo and Australia's biggest dairy company, Murray Goulburn.
The company said it would "consider its options regarding its strategic holding in WCB" after its offer closes at 7pm on Friday.
Saputo lobbed a four-tier offer for WCB on Tuesday to appease the Takeovers Panel. Under the fresh offer, shareholders will be paid $9 a share cash, which will rise according to Saputo's level of ownership: $9.20 at 50 per cent, $9.40 at 75 per cent and $9.60 at 90 per cent.
Murray Goulburn managing director Gary Helou urged shareholders to hold onto their shares, saying there was a "significant risk" Saputo would not be able to pay those prices. He said Murray Goulburn's bid was the superior offer, at $9.50 cash, despite it being conditional on approval from the Australian Competition Tribunal and acquiring at least a 50 per cent stake in WCB.
The tribunal's decision on the Murray Goulburn bid is expected by late February.
The battle for WCB is becoming a tough task, with all three bidders hold significant chunks of the company. Murray Goulburn has about 17 per cent, Bega Cheese owns more than 18 per cent, while Saputo's acceptances are almost 17 per cent.