Aussie dairy firms raise Warrnambool takeover bids

Australian dairy firms Murray Goulburn Co-operative (MG) and Bega Cheese have raised their takeover bids for the acquisition of Warrnambool Cheese and Butter (WCB).

Warrnambool is one of the leading milk processors in Australia, producing a range of dairy products including cheese, butter and butter blends and dairy ingredients, for domestic and export markets.

For the year ending 30 June 2013, the company posted consolidated revenues of C$477m with EBITDA of C$25m and expects EBITDA to be consolidate revenues of up to C$50m in 2014.

MG has increased its bid to A$9 a share or A$505m ($470m) from its initial offering of A$7.5 cash a share or A$420m, while Bega Cheese raised its offer to 1.5 of its shares and A$2 cash, up from 1.2 shares and A$2 cash that was announced in September.

As of the 13 November closing price, Bega’s offer is valued at A$8.87 a share.

MG stated that its offer is 24% premium to Bega’s offer, based on the closing price of the latter’s shares on ASX on 12 November.

To finance the transaction, the co-operative has secured A$350m of new facilities from its existing financiers National Australia Bank Limited (NAB), Australia and New Zealand Banking Group Limited (ANZ) and Westpac Banking Corporation (WBC).

If a deal is set, MG plans to optimise and upgrade processing assets in Western Victoria, including WCB’s existing Allansford facility.

The company is set to dispatch its bidder’s statement regarding the revised offer to all WCB shareholders by early December.

Lazard is providing financial advisory services to MG, while Herbert Smith Freehills is acting as legal advisor.

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Image: Revised bids now offered for Warrnambool Cheese and Butter. Photo courtesy of Suat Eman.