a2 Milk Company takeover talks with Dean Foods 'ceased': Freedom Foods
In its full-year results, published yesterday, Australian breakfast cereal and snack company Freedom Foods said talks between it and Dean Foods regarding a2MC had come to a halt.
In June, a2MC said it had received a conditional and non-binding Expression of Interest (EOI) from Freedom Foods and an "unnamed leading international" dairy later confirmed as Dean Foods.
The following month, it announced it would not recommend the deal to its shareholders as it did not find it "compelling."
a2MC later said there had been "no further communication" between it, Dean Foods and Freedom Foods.
Freedom Foods, which is the single largest shareholder in a2MC, yesterday confirmed that since the bid was rejected it has had “no communication" with a2MC, and that talks between it and Dean Foods had "ceased."
Freedom Foods added it was "disappointed that the Board of a2MC did not engage with the consortium."
In a statement issued earlier today, a2MC said it does not expect a revised offer from Freedom Foods and Dean Foods.
“Although there has been no formal withdrawal of the Expression of Interest, the Board continues to consider that no takeover offer is imminent," it said.
Available for sale?
a2MC was reclassified as an Available for Sale investment (AFS) by Freedom Foods after the resignation of its chairman Perry Gunner from the a2MC board in November 2014.
“Significant influence was deemed to be lost at the conclusion of the a2MC AGM and therefore on this date the Group has reclassified the investment to an Available for Sale investment (AFS),” it reiterated yesterday.
“As previously advised, the Company continues to review all its options with regard to its a2MC investment including evaluating the benefits of maintains a strategic stake in a2MC," it added.
Interest in a2MC is unsurprising given the dramatic rise of the a2 Milk brand.
a2 Milk is rich in beta casein protein, but contains no A1 beta casein protein, which has been linked to digestive discomfort.
In Australia, a2 Milk controls a 9% value share of the country's fresh milk market. Cream, ice cream and yogurt are also sold under the a2 Milk brand Down Under.
a2 Milk is now also available in the UK and US, and sales of a2 Platinum infant formula in Australia, New Zealand and China are growing.
In August, following its rejection of the bid tabled by Dean Foods and Freedom Foods, a2MC said it had received "other confidential enquiries indicating potential interest in the Company" and that it was "in the course of evaluating these."