The four-month long bidding war over Warrnambool Cheese and Butter (WCB) between Saputo, Murray Goulburn and Bega Cheese is finally over with Saputo emerging as an absolute winner.
Canadian Saputo is now the controlling shareholder in WCB with 52.7% of the shares, while shareholders that decided to sell to Saputo will get $9.20 a share. However, if Saputo’s stake in WCB reaches the 75% mark, shareholders will get $9.40 per share and $9.60 if the stake ups to 90%.
According to the news article on ABC, the Australian Stock Exchange has officially stopped trade in WCB at the request of Saputo, while WCB’s Chief Executive David Lord revealed the WCB board is “very pleased” with their decision to back the Canadian bid.
Mr Lord said he is confident that all other minority shareholders, including Murray Goulburn, will sell their shares as he himself waits to learn whether or not he will continue to serve as the company’s CEO.
Stock market analysts predict Saputo will get more than 90% of the shares of WCB, especially if Murray Goulburn decides to sell its chunk of the shares.
“One would say that if they did tender their 17.7, it would be a very real possibility that Saputo could get the 90% they require (to pay $9.60 a share), because it would mean other shareholders would be very much minority shareholders and there’s no real benefit in doing that,” said stock market analyst Bill Richmond.
Dairy farmers hope that this will increase the milk competition which in turn should result in higher prices for WCB suppliers.
“I guess Lino (Saputo) will be a very happy chappy, but it’s taken four months and a hell of a lot of cost to get it over the line. I’m just dying to know what our opening price is going to be next season. Everybody’s after milk, it’d better be good,” said Lorraine Robertson, dairy farmer and WCB supplier.
Most of the dairy farmers are confident that Saputo’s investment in Australia’s dairy industry will generate good results for them.
“I’ll just keep watching in interest and hopefully it all does mean it can maximise our farm gate price in the future,” said Lyndon Cleggett, a farmer from Glencoe, South Australia.
