Australian dairy company Bega Cheese on Thursday announced its intention to sell its 18.8 percent stake in Warrnambool Cheese and Butter Factory Company Holdings Limited (WCB) to Canadian dairy company Saputo.
Bega said it will receive between 94.7 million AU dollars (83.3 million U.S. dollars) and 101 million AU dollars (88.8 million U.S. dollars) from the sale of its WCB shares, depending on Saputo's relevant interest at the close of their offer.
The New South Wales-based dairy company said it will make a profit before tax and costs of between 61.8 million AU dollars and 68.2 million AU dollars from the sale. "The significant profit realized by the sale of our WCB holding will add to our capacity to pursue a number of strategic business opportunities which will ensure Bega Cheese's reputation for being a leader in manufacturing milk pay-rates and delivering stable and growing returns to shareholders,"Bega Cheese Executive Chairman Barry Irvin said in a statement released Thursday.
Irvin said Bega's investment in WCB had been a resounding success for both companies despite the fact its takeover bid for WCB was unsuccessful.
"Bega Cheese's takeover offer was the catalyst for a process which has highlighted the value of the Australian dairy industry, a rerating of Bega Cheese's share price and a substantial profit for Bega Cheese," he said.
Saputo is offering an unconditional 9.00 AU dollars per Warrnambool share, but that price could rise to as much as 9.60 AU dollars if it gets 90 percent or more acceptance.
On Monday, Saputo said it controlled 26.45 percent of WCB shares. The addition of Bega's 18.8 percent stake will give Saputo an interest of 45.25 percent.
Saputo's takeover offer for Warrnambool, which is final, closes on Jan. 22.
Rival takeover bidder Murray Goulburn, which has a 17.66 percent stake in Warrnambool, is offering a conditional 9.50 AU dollar a share in the bid.
But Murray's takeover offer is subject to no objection by the Australian Competition and Consumer Commission or the granting of authorization by the tribunal.