Home > Warrnambool urges shareholders to ignore Bega’s ‘unsolicited and highly conditional’ offer

Warrnambool urges shareholders to ignore Bega’s ‘unsolicited and highly conditional’ offer

Editorial
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Victorian dairy producer, Warrnambool Cheese and Butter has released a Target’s Statement to shareholders urging them to ‘ignore’ any documents sent to them by Bega Cheese Limited regarding the acquisition of WCB shares.

The document sets out the unanimous recommendations from WCB’s directors to reject Bega’s ‘materially inadequate offer’, namely stating that the offer is neither fair nor reasonable and that the Saputo Offer announced on the ASX on 8 October is superior to Bega’s.

“WCB has a highly credentialed management team that is well placed to generate strong future returns from WCB’s unique portfolio of dairy brands and assets,” said WCB chairman, Terry Richardson.

“WCB has a number of business improvement initiatives that are well underway and which are expected to underpin WCB’s outlook for improved performance.”

The document also states that Bega’s offer does not adequately reflect the strategic value of WCB to Bega. It stresses that Bega’s offer is highly conditional and uncertain - potentially resulting in further tax liability for WCB Shareholders and that the offer is highly opportunistic in nature as it fails to reflect the value of a number of recent business improvements initiatives undertaken by WCB.

The takeover offer from Saputo - one of Canada’s largest dairy processors - is being recommended by Warrnambool’s board, who have urged shareholders to accept the offer.

Saputo is offering an all cash takeover offer of AU$7.00 per share for all the shares in Warrnambool on issue at the end of the offer period, representing CA$378m.

Should shareholders choose to take Saputo’s offer, the takeover would be subject to the approval by the Foreign Investment Review Board and will require a minimum acceptance of more than 50 percent of Warrnambool shares to be successful. 

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