SYDNEY Canada's Saputo Inc (SAP.TO) declared its A$505 million ($463 million) bid for Warrnambool Cheese and Butter Factory Co WCB.AX unconditional on Monday and said it would hike its offer if it won control of Australia's oldest dairy maker.
The revised bid increases the pressure on rival bidder Murray Goulburn Co-operative Ltd, which has said it is considering increasing its offer that is conditional on securing approval from competition regulators.
But with Murray Goulburn, Bega Cheese Ltd (BGA.AX) and Kirin Holdings Co Ltd's (2503.T) Australian food and beverage business all holding significant stakes in Warrnambool, analysts warned the prospects for a successful resolution to the three-month takeover battle looked remote.
"Unless we see some of these bigger stakes pairing up, it's highly unlikely that we're going to see a takeover bid being successful," said Julia Lee, an equities analyst at Bell Direct.
Bega owns almost 18 percent of Warrnambool and Murray Goulburn holds 17 percent, while Kirin's Lion last month took a 10 percent stake in Warrnambool to protect its joint venture interests with the cheesemaker.
Saputo, Murray Goulburn and Bega have all lobbed repeated bids for Warrnambool, seeking to lock in a major supplier to the rapidly growing dairy market in Asia.
The Chinese dairy import market has expanded to around $4 billion currently from $400 million 10 years ago.
Saputo, Canada's largest dairy company, said it would pay shareholders A$9.20 per share in cash if it won more than 50 percent acceptances for its offer closing on December 13.
The simplified offer removes conditions associated with dividends payable by Warrnambool.
Murray Goulburn's A$9 per share bid is hamstrung because it needs regulatory approval from the Australian Competition and Consumer Commission (ACCC), meaning it cannot make an unconditional offer.
Murray Goulburn dropped a A$180 million bid for Warrnambool in 2010 after the ACCC expressed concerns about reduced competition for milk supplies.
Bega already has ACCC approval for its final offer of A$2 cash and 1.5 Bega shares per Warrnambool share, currently valued at around A$9 per share.
Warrnambool's board on Monday reiterated its support for Saputo and said directors and executives would be accepting the offer without delay.
Shares in Warrnambool have more than doubled since Bega launched an initial approach in September and last traded up 2.2 percent at A$9.25.
($1 = 1.0914 Australian dollars)
(Additional reporting by Thuy Ong; Editing by Stephen Coates)