Bega's $370m bid 'inferior', says Warrnambool
The dairy group has also set its sights on the potentially booming infant formula market in Asia, saying it would use its infrastructure and dairy brands to take advantage of expected strong demand for the baby product in the region.
The rejection of the takeover offer contained in WCB's Target's Statement builds on the independent expert report from KPMG released this week that tagged the Bega offer of 1.2 Bega shares and $2 cash per WCB share as "neither fair nor reasonable".
The plea to its own shareholders to reject Bega's advances hails straight from the takeover defence playbook and comes as WCB continues to cosy up to Saputo, which is offering $7 cash a share.
Saputo's offer values the 125-year-old Victorian dairy group at $390 million.
In its Target's Statement, WCB also sought to plump up its value by outlining several strategic and business improvement initiatives that it claims will build a portfolio of higher-margin dairy products.
These include a recent deal between it and the Tatua Cooperative of New Zealand, under which Tatua will license WCB to use its intellectual property for the extraction and processing of lactoferrin from milk. Lactoferrin is used in infant formulations.
WCB also said it intended to launch Sungold-branded cream cheese into the export market through an exclusive agreement with global player Kraft.
Warrnambool closed down 1¢ to $7.21. Bega was down 2¢ to $3.83.
Frequently Asked Questions about this Article…
Warrnambool Cheese & Butter Factory is rejecting Bega Cheese's $370 million takeover bid because they consider it inadequate and inferior compared to the offer from Canadian dairy group Saputo, which is offering $7 cash per share.
The independent expert report from KPMG states that Bega's offer of 1.2 Bega shares and $2 cash per WCB share is 'neither fair nor reasonable.'
Saputo is offering $7 cash per share, valuing Warrnambool Cheese & Butter Factory at $390 million.
Warrnambool Cheese & Butter Factory plans to increase its value by outlining several strategic and business improvement initiatives, including a deal with the Tatua Cooperative of New Zealand for the extraction and processing of lactoferrin from milk, and launching Sungold-branded cream cheese into the export market through an exclusive agreement with Kraft.
Lactoferrin is a protein used in infant formulations. Warrnambool Cheese & Butter Factory has a deal with the Tatua Cooperative of New Zealand to license its intellectual property for extracting and processing lactoferrin, which is part of their strategy to build a portfolio of higher-margin dairy products.
Warrnambool Cheese & Butter Factory is targeting the potentially booming infant formula market in Asia, aiming to take advantage of the expected strong demand for baby products in the region.
The exclusive agreement with Kraft allows Warrnambool Cheese & Butter Factory to launch Sungold-branded cream cheese into the export market, which is part of their strategy to expand their product offerings and increase their market presence.
Following the takeover bid news, Warrnambool's stock closed down 1 cent to $7.21, while Bega's stock was down 2 cents to $3.83.
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