Fresh twist in dairy battle as Fonterra moves on Bega Cheese
The defensive move, valued at more than $75 million, adds to the intrigue in the three-way fight for control of Warrnambool Butter and Cheese, given Bega remains one of the suitors with a live bid on the table for the producer.
Goldman Sachs on Thursday was seeking a 10 per cent stake in Bega on behalf of client Fonterra. The broker was understood to be offering $4.95 a share, a premium on the closing price of $4.41.
Analysts said the Fonterra move was aimed at protecting its commercial arrangement with Bega. Fonterra effectively leases Bega's cheese brand, with the New Zealand major supplying some products processed in Bega's facilities.
The move is also seen as a way for Fonterra to secure an indirect stake in WCB amid the hotly-contested battle for the dairy maker. Bega has a 17.9 per cent stake in Warrnambool.
It comes days after Japanese-owned brewer and dairy company Kirin bought a 10 per cent stake in WCB through its Lion subsidiary, complicating efforts by Bega, Murray Goulburn and Canada's Saputo to take over the prized dairy group.
The Warrnambool board has unanimously backed an offer by Saputo of $8 a share, pending any better offers. It has so far shunned earlier bids by Bega and Murray Goulburn. Bega has offered $2 cash and 1.2 of its shares, worth $7.29, per Warrnambool share. Murray Goulburn has offered $7.50 a share in cash.
The development came as the Australian Competition and Consumer Commission gave the green light for Bega's bid. In a note to Warrnambool shareholders, Bega said the ACCC would "not object" to its efforts to acquire the group.
The ACCC said there was "limited overlap" between Bega and WCB in relation to the acquisition of raw milk in the dairy region in south-west Victoria and areas of northern Victoria.
Frequently Asked Questions about this Article…
Fonterra, a New Zealand dairy heavyweight, is seeking to acquire a 10% stake in Bega Cheese. This move, valued at over $75 million, adds a new twist to the ongoing battle for control of Warrnambool Butter and Cheese, where Bega is one of the suitors.
Fonterra, a New Zealand dairy giant, is seeking to acquire a 10% stake in Bega Cheese, valued at over $75 million. This move adds complexity to the ongoing battle for control of Warrnambool Butter and Cheese, where Bega is one of the contenders.
Fonterra's interest in acquiring a stake in Bega Cheese is seen as a defensive move to protect its commercial arrangement with Bega. Fonterra leases Bega's cheese brand and supplies products processed in Bega's facilities.
Fonterra's interest in acquiring a stake in Bega Cheese is seen as a defensive move to protect its commercial arrangements with Bega. Fonterra leases Bega's cheese brand and supplies products processed in Bega's facilities.
By acquiring a stake in Bega Cheese, Fonterra could secure an indirect stake in Warrnambool Butter and Cheese, as Bega holds a 17.9% stake in Warrnambool. This adds complexity to the ongoing battle for control of the dairy maker.
By acquiring a stake in Bega Cheese, Fonterra could secure an indirect stake in Warrnambool Butter and Cheese, as Bega holds a 17.9% stake in Warrnambool. This adds another layer to the competitive landscape for control of the dairy maker.
Besides Bega Cheese, other companies involved in the battle for Warrnambool Butter and Cheese include Murray Goulburn, Canada's Saputo, and Kirin, a Japanese-owned company that recently acquired a 10% stake in Warrnambool through its Lion subsidiary.
The Warrnambool board has backed an offer from Saputo at $8 per share, while Bega has offered $2 cash and 1.2 of its shares per Warrnambool share, valued at $7.29. Murray Goulburn has made a cash offer of $7.50 per share.
Saputo has made an offer of $8 per share for Warrnambool, which the board has backed, pending better offers. Bega has offered $2 cash and 1.2 of its shares, worth $7.29 per Warrnambool share, while Murray Goulburn has offered $7.50 per share in cash.
The ACCC has given the green light for Bega's bid, stating that there is 'limited overlap' between Bega and Warrnambool in terms of raw milk acquisition in the dairy regions of Victoria.
The ACCC has given the green light for Bega's bid for Warrnambool, stating that there is 'limited overlap' between Bega and Warrnambool in terms of raw milk acquisition in the dairy regions of south-west and northern Victoria.
Kirin, through its Lion subsidiary, recently acquired a 10% stake in Warrnambool, complicating the efforts of Bega, Murray Goulburn, and Saputo to take over the dairy group.
Kirin's acquisition of a 10% stake in Warrnambool through its Lion subsidiary complicates the efforts of Bega, Murray Goulburn, and Saputo to take over the prized dairy group, adding another layer of competition to the takeover battle.
Goldman Sachs is acting on behalf of Fonterra to acquire the 10% stake in Bega Cheese, offering $4.95 per share, which is a premium over the closing price of $4.41.
Goldman Sachs, on behalf of Fonterra, offered $4.95 per share for Bega, which is a premium over the closing price of $4.41. This premium indicates Fonterra's strong interest in securing a stake in Bega and its strategic importance in the ongoing dairy sector shake-up.
Acquiring a stake in Bega Cheese could help Fonterra protect its existing commercial arrangements and potentially gain an indirect influence in the ongoing battle for Warrnambool Butter and Cheese.
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