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Australian regulator blocks Saputo WCB takeover bid

By Mark Astley+

02-Dec-2013

Canadian dairy giant Saputo has been ordered by the Australian Takeovers Panel not to process any acceptances received under its latest bid for Warrnambool Cheese and Butter (WCB), following a complaint by rival bidder, Murray Goulburn. 

The order prevents Saputo from “processing any acceptances received under its bid for Warrnambool and requires the effect of the interim order to be disclosed.”

It was issued on the back of a request to the Takeovers Panel, Australia’s main forum for resolving takeover disputes by rival suitor, Murray Goulburn. It asked that Saputo be “restrained from processing acceptances and acquiring Warrnambool shares” following the announcement of an “improved and simplified” offer by the Canadian dairy giant.

Quebec-based Saputo announced last week that its 15 November offer would increase from AU$9.00 (US$8.20) per share to AU$9.20 (US$8.40) if more than 50% of WCB’s shareholders accepted the offer. It also removed all conditions and special dividends from the deal.

The order will remain in place until further orders are issued by the Takeovers Panel, proceedings are concluded, or once two months have passed.

"Preserve the status quo"

Responding the Takeovers Panel's decision, Saputo said that the interim order is merely a way to “preserve the status quo” and "not necessarily indicative of the merits of the application."

It reminded WCB shareholders, however, that in the meantime it cannot process any acceptances.

“However, the effect of those interim orders is that Saputo Dairy Australia must not take steps to process any acceptances received under its bid for Warrnambool including making payments to any Warrnambool shareholders in respect of those acceptances at this time,” said a statement posted on the Australian Stock Exchange (ASX) website.

“This means that whilst Warrnambool shareholders may still complete and send acceptances to the Offer, Saputo Dairy Australia cannot process those acceptances at this time. In respect of acceptance already received, Saputo Dairy Australia will not be able to pay accepting Warrnambool shareholder their shares whilst the Panel’s interim orders remain in force.”

Take no action

Meanwhile, Murray Goulburn has upped its WCB takeover bid from AU$9.00 (US$8.20) cash per share to AU$9.50 per share (US$8.65) - a bid it believes "represents compelling value for WCB shareholders, delivers then a demonstrably superior value outcome relative to all other competing proposals, and is simple and straightforward."

WCB, which manufactures a wide range of dairy products for the Australian market and export, is yet to issue a formal response to Murray Goulburn's latest offer.

“WCB’s board of directors will meet shortly to give due and careful consideration to the amended MG proposal, as it has done for each of the eight proposals made previously," said the company in a statement.

“Until WCB’s directors have issued their formal response to the Amended MG Proposal shareholders are advised to take no action in relation to their shares.”

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