Saputo increases stake in Australia's Warrnambool, on par with Murray Goulburn

SYDNEY – Canada’s Saputo Inc. (TSX:SAP) says it has received nearly 18 per cent of shares in Warrnambool Cheese and Butter Factory as part of its friendly takeover offer for Australia’s oldest dairy producer.

That puts the Montreal-based cheese company slightly ahead of its chief rival for WCB, Murray Goulburn Co-operative Ltd., according to the latest available figures.

Warrnambool is seen as a potential toe hold in the Asia-Pacific region for Canada’s largest cheese and dairy company, which also has a major presence in the United States and operations in South America.

According to documents filed Dec. 24 with the Australian Securities Exchange, Saputo had received just over 10 million shares of Warrnambool under its latest offer.

Of those tendered, about 7.5 million are subject to withdrawal rights — meaning the owners have the right to get them back under certain circumstances.

However, about 2.5 million of the WCB’s shares in Saputo’s possession aren’t subject to withdrawal rights, meaning the company is assured of owning about 4.6 per cent of Warrnambool.

In contrast, Murray Goulburn increased its direct and indirect holdings in WCB to 9.9 million shares as of its Dec. 24 filing, up 224,918 due to shares held on its behalf by Pershing Australia Nominees Pty.

Murray Goulburn has offered AU$9.50 cash per Warrnambool share, if it gets at least 51 per cent of the total.

Saputo and WCB’s board have noted that Murray Goulburn’s offer is also conditional on obtaining approval from Australia’s competition tribunal, while Saputo’s bid doesn’t face that hurdle.

Saputo (TSX:SAP) is currently offering AU$9 per share if it doesn’t get a majority of WCB’s stock but it would pay more if it gets more than 50 per cent of outstanding shares.

Saputo will pay AU$9.20 per Warrnambool share if it gets a simple majority, AU$9.40 per share if it gets 75 per cent of the total and AU$9.60 per share if it gets at least 90 per cent of WCB’s stock.

Warrnambool shares closed Friday at AU$9.27, up two cents from the previous close on the ASX.