Analysts say the bidding war for Warrnambool Cheese and Butter is reaching a critical point, as the number of shares on the market dry up.
Victorian dairy co-operative Murray Goulburn and Canadian company Saputo are both attempting to take over Australia’s oldest dairy processor.
Murray Goulburn and Bega Cheese each have an 18 per cent stake in Warrnambool, while Saputo has received 18 per cent of shareholder acceptances for its bid.
Senior analyst with Bell Potter Securities, Bill Richmond, says now Bega is out of the running for Warrnambool, there’s speculation about what it will do with its shares.
“There’s been a number of rumours around the traps that the Chinese are interested in it,” he said.
“I think that that’s nothing more or less than that – just a rumour.
“But you’ve got Saputo who will probably extend their bid on Friday. You’ve got Murray Goulburn who are reiterating that they’ve got the most compelling case.
“You can understand why some shareholders are very confused.”
Murray Goulburn yesterday released a statement to the Australian Stock Exchange to remind WCB shareholders of its $9.50-a-share offer for Australia’s oldest dairy processor.
Soon after Murray Goulburn released its statement, WCB’s board again told shareholders to reject the offer and instead support Canadian dairy company Saputo’s takeover bid.
In a statement, the board says suppliers should reject Murray Goulburn’s offer, which is more expensive than Saputo, because the bid carries more risk.
Murray Goulburn’s takeover requires approval from the Australian Competition Tribunal.
Mr Richmond says Murray Goulburn’s statement was a public relations stunt ahead of Friday’s deadline for Saputo’s offer.
“No one can make any definitive comment as to what (Saputo is) likely to do,” he said.
“I would suggest that they are likely to (extend the offer) but they just as easy may not, in which case it would be a new situation for the entire Warrnambool Cheese and Butter board.”