Saputo adds sweetener to Warrnambool

Saputo's chief executive has issued a "call to action" to Warrnambool Cheese & Butter shareholders, throwing them an extra $10 million in a final effort to clinch control of the company.

The Canadian dairy behemoth on Monday sweetened its offer for Australia's oldest-listed dairy processor to $9.20 a share or about $515 million.

But the extra cash will only be paid if Saputo secures more than 50 per cent of Warrnambool shares.

Saputo, which has maintained an unconditional offer of $9, is facing a tough task to secure a majority stake in Warrnambool, with rival bidders Bega and Murray Goulburn owning about 36 per cent of Warrnambool and Japanese food conglomerate Kirin another 10 per cent.

The 20 cent sweetener has effectively replaced a 46 cent special dividend that Warrnambool was going to pay shareholders if Saputo gained 50.1 per cent of the company.

Warrnambool's board, which continues to endorse Suputo's offer, also revoked its intention to pay a dividend of 85¢ a share if Saputo snapped up 90 per cent of the company. Warrnambool argued the payments were "no longer needed".

Saputo chief executive and vice-chairman Lino Saputo jnr, who is in Melbourne on his third visit to Australia in six weeks, said he was hoping to finalise the deal before Christmas.

"Let's put things into perspective: we are coming into the holiday period, within five days people can have cash in the bank and enjoy the holidays.

"I think a bird in the hand is better than two in the bush and this, to me, would be a call to action for the shareholders to deposit their shares to Saputo."

It is a big week for Warrnambool shareholders. Murray Goulburn is holding two public meetings in Warrnambool, western Victoria, and south-east South Australia, while Mr Saputo will visit shareholders in Mount Gambier on Tuesday evening, before making his final pitches to farmer shareholders in Terang and Warrnambool on Wednesday.

Murray Goulburn managing director Gary Helou told the co-operative's shareholders on Friday that Treasurer Joe Hockey had "handicapped" its bid of $9 cash a share by giving Saputo foreign investment approval before the Australian Competition Tribunal heard Murray Goulburn's case - a process that could take up to six months.

However, Mr Saputo said Mr Helou's comments were confusing.

"We went through the normal process and the normal channels. I don't quite understand the comment," Mr Saputo said.

"All parties were aware of the Australian regulatory approval process. We followed the guidance of local people here and it was successful, so I'm not quite sure what Gary Helou is referring to."

RBS Morgans analyst Belinda Moore said the amended offer was tidier and a "nice Christmas windfall".

"It's a nice simple deal now. There is no messiness around if you'll get a dividend or franking credits and what that will mean," Ms Moore said.

Analysts now expect Murray Goulburn to review its bid in the next day or two, otherwise the co-operative would miss out.

Bega has offered $2 cash plus 1.5 Bega shares, valuing its unconditional bid at $8.97 based on Monday's close.

Although many now say the NSW-based company may have been squeezed out of the bidding war.

Bega's offer closes this Thursday, while Murray Goulburn is planning to lodge its submission to the competition regulator on Friday.

Saputo's offer is open until December 13.





Carving up Warrnambool Key shareholders

Bega 18%

Murray Goulburn 17%

Kirin 10%

Saputo 1%

Others 54%