Canada’s Saputo Inc. extended its offer for Australia’s Warrnambool Cheese and Butter Factory Holdings Co. on Friday, just hours before the bid deadline, ensuring the heated battle for the country’s oldest dairy firm will wage on.
Saputo announced a two-week extension for its A$515-million ($458-million U.S.) offer until Jan. 22 and reserved the right to extend it further, keeping up the pressure on bidding rival Murray Goulburn Co-operative Co. Ltd.
At stake is a platform for rapidly growing sales of both traditional dairy products and high-tech milk extracts into China.
Saputo, Canada’s largest dairy firm, is now the biggest shareholder in Warrnambool with acceptances worth 21.39 per cent of the company.
That puts it just ahead of former bidder Bega Cheese Ltd, which holds 18.8 per cent of the company, and Murray Goulburn, which owns 17.7 per cent. Japanese beverage giant Kirin Holdings Co. Ltd. holds a further 10 per cent.
Saputo’s unconditional cash offer of A$515-million ($461-million), backed by Warrnambool, will rise as high as A$549-million ($492-million) if it receives acceptances of 90 per cent or more of Warrnambool shareholders.
Murray Goulburn’s A$530-million bid is dependent on regulatory approval, which is not expected until the end of next month. The company has said it may increase its stake in Warrnambool via market purchases.
Bega, which kicked off the bidding war in September but dropped out last month, has yet to decide what it will do with its stake. Bega Chief Executive Barry Irvin said on Thursday it will consider both its shareholders and the broader market.
Irvin has sided with Murray Goulburn in its submission to the Australian Competition Tribunal, saying it did not believe a takeover by Murray Goulburn would lessen competition.
Kirin bought its stake in October to protect its distribution agreement with Warrnambool and has said it will not use it as a “foothold to become involved in a bidding war.”