(Recasts on Wilmar, adds analyst comment, background on Asian
demand for Australian food)
* Goodman has no better offer
* Massive impairment charge
* Strong demand from Asia for Australia/NZ food companies
By Gyles Beckford and Byron Kaye
WELLINGTON/SYDNEY, July 2 Malaysian billionaire
Robert Kuok's Wilmar International Ltd has convinced
Goodman Fielder Ltd to accept a lower takeover offer,
as the Australasian food firm warned of a massive impairment
charge due to pressures on its baking unit.
Wilmar and Hong Kong investment firm First Pacific will now
pay A$1.32 billion ($1.25 billion) or 67.5 cents per share for
the struggling maker of Country Life bread and Meadow Lea
margarine, Goodman said in a statement to the Australian
Securities Exchange on Wednesday.
Just a month earlier, Wilmar and First Pacific were willing
to pay A$1.37 billion or 70 cents per share after Goodman
rejected their initial offer of 65 cents.
Goodman gave no reason for the lower offer, but said it
expected an impairment charge of up to A$400 million in the
2013-14 financial year due to "challenging trading conditions
and outlook" at its bakery business.
The revised offer "represented an attractive value outcome
for shareholders", Goodman Chairman Steve Gregg said in the
The Sydney-based company's willingness to accept a 3.5
percent cut in the takeover offer comes as Australian and New
Zealand bread and dairy producers face intense pricing pressure
domestically due to weak consumer confidence and tough
At the same time, however, they are attractive takeover
targets for rivals hoping to tap strong demand for quality food
to feed Asia's growing middle class.
Goodman has been seen as failing to capitalise on its
regional expansion prospects, and until recently was seeking
interest from potential buyers for its New Zealand dairy
business as a stand-alone entity.
"If there was another potential bidder they would have come
out of the woodwork by now," Morningstar analyst Peter Rae said.
"If (Goodman) want a deal to go through, then they've got to
accept the lower price."
Goodman shares fell 3 percent to A$0.655 at 0230 GMT, below
Wilmar's downgraded offer price.
In January, Canada's Saputo Inc took control of
Australia's Warrnambool Cheese and Butter Factory Company
Holdings Ltd after an epic bidding war involving nine
players from Australia and Asia. Japan's Kirin Holdings Co Ltd
, an underbidder, held onto a 10 percent
The same month, China's state-owned Bright Food
bought Western Australian yoghurt and cheese producer Mundella
Foods for an undisclosed sum, three years after paying A$530
million for a 75 per cent stake in Australian food supplier
The expected impairment charge of A$300 million to A$400
million compares with Goodman's April 2 warning that its
full-year earnings were likely to be 15 percent below analysts'
expectations of A$180 million.
($1 = 1.0574 Australian Dollars)
(Editing by Stephen Coates)