Saputo obtains controlling stake in Warrnambool Cheese and Butter

Canadian dairy firm Saputo has increased its shareholding in Australia’s Warrnambool Cheese and Butter Factory Company (WCB) to 52.7%, gaining a controlling stake.

Earlier this month, Saputo acquired Bega Cheese’s 18.8% stake in the Australian dairy processor to increase its interest to 45.2%; the transaction ended the latter’s relationship with WCB.

Warrnambool produces a range of dairy products, including cheese, butter and butter blends, milk, cream and dairy ingredients for domestic and export markets.

The company sources its milk from dairying regions in Australia, including south-west Victoria, south-east South Australia and the Fleurieu Peninsula.

In October 2013, Saputo initially announced a $370m all-cash bid for WCB; however, it later increased its offer in November to A$9 a share.

The company will now increase its offer consideration from AUD9 ($7.99) to AUD9.20 ($8.17) cash per Warrnambool share, as it gained more than 50% interest in the offer period.

The Canadian dairy firm has also extended its offer by two weeks, and intends to pay up to AUD9.60 ($8.52) per share should it secure a 90% or more stake in WCB.

The offer will close on 4 February 2014, and is automatically extended pursuant to Australian law.

Rothschild and Rabobank are acting as the financial advisers to Saputo on this transaction, while Maddocks and Stikeman Elliott are the legal advisers.

Saputo produces, markets and distributes a wide array of dairy products, including cheese, fluid milk, extended shelf-life milk and cream products, cultured products and dairy ingredients.

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Image: Saputo now has majority control of Warrnambool. Photo courtesy of Stephanie Berghaeuser.