* Saputo bid to rise as high as $492 mln on 90 pct
* Offer is final, deadline extended to Jan. 10
* Saputo leading rivals Murray Goulburn, Bega in race
By Jane Wardell
SYDNEY, Dec 17 Canada's Saputo Inc
stepped up its bid for Australia's Warrnambool Cheese and Butter
Factory Holdings Co on Tuesday, aiming to knock out its
rivals with a final sweetened offer after receiving a regulatory
rap over the knuckles.
Saputo's unconditional cash offer of A$515 million ($461
million) for Australia's oldest dairy company will rise as high
as A$549 million ($492 million) if it receives acceptances of 90
percent or more of Warrnambool shareholders.
That looks tough on paper given takeover rivals Bega Cheese
Ltd and Murray Goulburn collectively own about 35
percent of Warrnambool shares, while Japanese beverage giant
Kirin Holdings Co Ltd holds a further 10 percent.
But analysts say Saputo's offer - now rising from A$9.00 to
A$9.20 on 50 percent acceptances, A$9.40 on 75 percent
acceptances and A$9.60 on 90 percent acceptances - is the clear
frontrunner as Murray Goulburn is hamstrung by regulatory
hurdles and Bega's offer lags on price.
"In my view it means Murray Goulburn's offer is now not good
enough," said Shannon Rivkin, director of Rivkin Securities.
"They probably have to come back with an increased offer if they
want to stay in the game, otherwise they have to accept the
their fate and probably even sell to Saputo."
The takeover battle for Warrnambool has been one of the most
hotly contested in Australia in recent years, with Saputo's
final offer marking the 10th bid or revised bid since Bega
kicked off the bidding war in mid-September.
Acquiring Warrnambool would give Saputo, which has the
backing of the Australian company's board, a platform for
rapidly growing sales of both traditional dairy products and
high-tech milk extracts into China.
Saputo agreed to raise its offer price above 75 percent
acceptances and extend the deadline to Jan. 10 to appease
Australia's Takeovers Panel, which was harshly critical of
previous revisions that gave shareholders special dividends at
certain acceptance levels.
In response to complaints from Murray Goulburn and Bega, the
panel had ruled on Nov. 29 that Saputo stop processing
acceptances while it considered whether to take action.
The regulator said on Tuesday that complex changes by Saputo
and Warrnambool were "most undesirable" and "caused confusion
and disruption in the market for Warrnambool shares."
However, it stopped short of issuing a so-called
"declaration of unacceptable circumstances," which could have
nixed Saputo's sweetened offer, and instead accepted commitments
to increase the value of the offer above 75 percent acceptances.
Saputo declared the revised bid price final, meaning it
cannot further sweeten its offer, but it reserved the right to
extend the offer deadline again.
"It is a simple clean cash offer, at a very attractive
price, designed to encourage acceptances and deliver greater
value to WCB shareholders," a Saputo spokesman said in an
Saputo said it would immediately begin processing the
acceptances that have been steadily building since the
As of Monday, it had received acceptances worth 16.916
percent, taking it close to the 18 percent stakes held by each
of Murray Goulburn and Bega. Saputo has been picking up shares
from Warrnambool's dairy farmer and supplier base, which
collectively held 30-40 percent of the company before the
Saputo and Murray Goulburn have been the more aggressive
bidders in the race for Warrnambool, while Bega has trailed with
a cash and shares offer currently worth around A$515 million.
Murray Goulburn is hampered by the fact its A$9.50 per
share, or A$530 million, offer is conditional because it
requires competition regulator approval that could take months.
The Australian Competition Tribunal has set Feb. 10 as the
start of public hearings into Murray Goulburn's offer, with a
decision likely to take up to three to six months.
Warrnambool shares rose 0.2 percent to A$9.27, having more
than doubled since Bega kicked off the bidding war in
mid-September. Bega shares were unchanged at A$4.39. Saputo
shares closed 0.1 percent lower at C$47.17 in Toronto.