David Lord, Warrnambool Cheese and Butter Factory Ltd’s chief executive, says his company “never got the chance to fully evaluate” Murray Goulburn Co-operative Ltd’s takeover offer as Saputo Inc moved within the week to trump the rival bid.
“We had preliminary meetings with Murray Goulburn to obtain more information and the (Warrnambool) board was in the process of reviewing the bid,” Lord told DataRoom. “But Saputo’s revived offer arrived.”
Finalised in the early hours of this morning, Saputo’s $8 conditional cash offer for a majority stake in Warrnambool, is 6.6 per cent higher than Murray Goulburn’s $7.50 cash offer last Friday.
Lord says Saputo’s offer is “superior” financially to two other bids and ensures certainty and clarity for dairy farmers who supply Warrnambool as the Montreal-based company has pledged to retain Warrnambool staff and invest in the company’s infrastructure.
He says “Saputo seems very confident” it can win Foreign Investment Review Board approval.
Murray Goulburn says it plans to continue to pursue a Warrnambool takeover.
“Murray Goulburn remains committed to acquiring Warrnambool,” the dairy cooperative says in a statement. “Murray Goulburn believes it is reasonable and in the national interest that Saputo’s Foreign Investment Review Board application is not resolved until the public benefits of Murray Goulburn’s proposed acqusition of Warrnambool has been given full consideration.”
Saputo chief executive Lino Saputo Jr and Lord will spend three days next week in the Warrnambool area meeting with suppliers and Warrnambool shareholders to reassure them Saputo’s takeover is in the best interest of the Victorian dairy producer.
About 38 per cent of Warrnambool shareholders live in western Victoria’s dairy country and Lord says “next week we’ll get more of a representative view as to what shareholders and suppliers think of Saputo’s bid”.
Lord dismisses concerns that Australia’s dairy industry is being taken over by foreigners. Kraft, Nestle and Fonterra have been making dairy investments in Victoria for as long as 50 years, he says.
“Some people are making emotional arguments about foreign investment,” says Lord, referring to Bega Ltd chairman Barry Irvin and Murray Goulburn managing director Gary Helou’s warnings about foreign acquisitions of Australian dairy assets.
The Warrnambool chief says Bega’s offer is “inadequate” and “does not recognise the true value of Warrnambool”.
At 1453 AEDT, Bega’s takeover offer is worth $6.788 a share. Warrnambool shares were trading at $8.44.
Bega and Murray Goulburn own a combined 35 per cent of Warrnambool.