Takeover target Warrnambool Cheese and Butter factory (WCB) wants one of its three suitors, Murray Goulburn Co-operative, to provide more information over aspects of its bid.
Murray Goulburn announced its takeover proposal for WCB on October 18, joining Bega Cheese and Canadian dairy giant Saputo in the battle for the company.
Murray Goulburn has bid $7.50 per share for WCB, valuing the target at $420 million and surpassing the earlier bids from Bega and Saputo.
WCB chairman Terry Richardson on Thursday said WCB had met with Murray Goulburn seeking further details of its proposal.
Mr Richardson said the Murray Goulburn offer was within the “fair value” range determined by an independent expert but was subject to a competition condition that was currently uncertain and would take several months to be determined.
“There is uncertainty about the ability of Murray Goulburn to satisfy the competition condition, and we require them to clearly articulate their intentions for WCB, its business, suppliers, employees and other stakeholders,” Mr Richardson told the company’s annual general meeting in Warrnambool.
The Murray Goulburn proposal is subject to approval by regulators, which could prove problematic given the Australian Competition and Consumer Commission opposed Murray Goulburn’s previous attempt to take control of WCB, in 2010.
But Murray Goulburn has said it will seek formal merger authorisation through the Australian Competition Tribunal, which applies a net public interest test in contrast to the ACCC’s focus on competition.
Before Murray Goulburn launched its bid, the WCB board had backed the Saputo offer, in the absence of a superior offer.
Saputo is offering $7 per WCB share, which values WCB at $390 million.
Mr Richardson said that offer was of fair value, and Saputo had indicated that it would increase WCB’s production capacity, retain its employees, introduce new products and pay a competitive milk price to dairy farmers.
He said the independent expert had assessed the Bega offer of $2 in cash and 1.2 Bega shares for each WCB share as neither fair nor reasonable.
WCB believed the Bega offer, if successful, would result in job losses, reduced competition and lead to a regional milk pricing system.
Shares in WCB were 2.5 cents lower at $8.105 at 1332 AEDT.