SYDNEY The second-largest shareholder in Warrnambool Cheese and Butter Factory Company Holdings Ltd WCB.AX launched a A$420 million ($405 million) bid for the Australian dairy company on Friday, joining a three-way takeover battle as it seeks to consolidate the struggling sector.
Murray Goulburn Co-operative Co Ltd said on Friday it planned to make a A$7.50 per share cash bid, trumping a A$7 per share bid by Canada's Saputo Inc (SAP.TO), which had knocked out an initial approach from Australian company Bega Cheese Ltd BGA.A.
Murray Goulburn said it had secured financing for the deal, which it said would create one of the top 20 dairy companies in the world and protect the interests of Australian dairy farmers.
The sector has been struggling with a combination of factors, including a supermarket price war that slashed domestic wholesale prices, a strong Australian dollar that crimped exports and a drought that sent cattle feed costs soaring.
WCB shares closed on Thursday at A$7.42, reflecting investor expectations of further bids.
($1 = 1.0382 Australian dollars)
(Reporting by Lincoln Feast; Editing by Lisa Shumaker)