Saputo has already won the protracted bidding war, with rivals Murray Goulburn and Bega Cheese accepting Saputo’s offer. Saputo secured 50% (and control) of Warrnambool Cheese & Butter on 21 January.
If Lion fails to accept into Saputo’s $500m+ offer, it will prevent the Montreal-based company from reaching the 90% hurdle, at which point a compulsory acquisition takes place.
It would also prevent other WCB shareholders from receiving an additional 20¢ per share, for a total of $9.60 a share in cash, that Saputo will pay if it gets to the 90% mark.
On 29 January, Saputo took Murray Goulburn’s 17.7% WCB shareholding, taking its stake to 77% and triggering a 20¢ rise in its offer to $9.40 a share (worth $526m). At the 50% mark, shareholders were entitled to $9.20 a share. The increase in Saputo’s offer price also means its offer, which is last and final, will be extended until 7pm on 12 February. Before the extension, the offer was due to close on 4 February.
If Lion refuses to sell its stock, WCB will remain listed on the ASX and Saputo will have to keep paying listing fees and dealing with the legal requirements associated with being an Australian public company.
Lion seized its 10% WCB stake in a share raid in October 2103 at prices of up to $9.25 a share. The company has said only that it wants to strengthen its relationship with WCB and protect cheese supply contracts it has with the company.
According The Age, Saputo has been ‘unenthusiastic regarding talks with Lion about its supply arrangements’.
Source: The Age
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