John Durie from The Australian discusses the latest business developments surrounding Warrnambool Cheese Butter.
The takeover bidding war for Warrnambool Cheese and Butter is almost over with Bega selling its stake to Saputo. Picture: AP. Source: AP
IT'S a company with an almost unpronouncable name you had never heard of until four months ago. But there's been a pitched takeover battle for control of 125-year old Australian company Warrnambool Cheese and Butter (WCB) with suitors wooing the dairy producer with wads of cash. Forget about mining, it's all about milk. Now is the time to trade in those magic beans for some cows.
WCB's shareholders are raking it in while major companies climb over each other to get a piece of the business. Its share price has more than doubled from $4.51 to $9.40 in that short time.
The latest salvo from dairy giant Saputo yesterday has put the momentum firmly behind the Canadian company, leaving rival Victorian farmers' co-op Murray Goulburn in a tenuous position. Fellow Aussie producer Bega, which started the bidding war in September but dropped out in December, sold its 18.8 per cent share of WCB to Saputo, which gives the Canadian firm more than 45 per cent share in the business. Saputo is offering more than $500 million for WCB. Japanese-controlled Lion also threw its hat in the ring at one point, paying more than $50 million for a 10 per cent stake.
But why are the rivers of gold flowing with milk? Like so many things, it has to do with China. China is the world's largest importer of dairy products with demand set to skyrocket to meet demands from its billion-plus consumers increasingly adopting a 'Westernised' diet. China's reliance on imported dairy products has grown between 20 and 30 per cent in the past two years, according to a Rabobank report, and is tipped to meet 20 per cent of its milk demand from overseas sources.
Our friends over the ditch in New Zealand have been milking this Chinese appetite with Kiwi dairy behemoth Fonterra already set up with its own farms and 400-person operation in China. A Wall Street Journal report said dairy accounted for 25% of NZ's $NZD47 billion export industry. Fonterra controls 90 per cent of NZ's dairy production.
Which is why WCB is such a prime target for takeover, especially for Saputo which has said continued growth in its home country of Canada was being hampered by regulation such as production caps. WCB is also a shiny and profitable prospect because of its underperformance compared to market opportunities, which would give its new owners prospects to improve on that bottom line.
So after four months, this extraordinary takeover war is almost over. Murray Goulburn has few avenues left and its offer is still subject to approval from the Australian Competition Tribunal whose decision is scheduled for 28 February. The WCB board and managing director David Lord have long publicly endorsed Saputo, which has said it would leave the current WCB management team in place.
Lord said it hoped Murray Goulburn would get on board with the Saputo offer. He said: "We would be very disappointed if all WCB shareholders didn't take advantage of what is a significant price premium compared to our share price when this process started."
Lord added the WCB board believe the Saputo offer of $9.50 a share is the "superior offer". Saputo's offer closes on 22 January.
Stay tuned.
###
Anda sedang membaca artikel tentang
The Aussie company bigwigs are fighting over
Dengan url
http://segarasa.blogspot.com/2014/01/the-aussie-company-bigwigs-are-fighting.html
Anda boleh menyebar luaskannya atau mengcopy paste-nya
The Aussie company bigwigs are fighting over
namun jangan lupa untuk meletakkan link
The Aussie company bigwigs are fighting over
sebagai sumbernya
0 komentar:
Posting Komentar