Hunt for Warrnambool intensifies

The ongoing attempt to acquire a controlling stake in the Australian Warrnambool Cheese and Butter (WCB) factory has intensified this week.

New Zealand’s Fonterra snapped up a 6% stake in one of the firms in the hunt for WCB, Bega Cheese, for $46M.

raw milk

WCB is a major manufacturer of dairy products for the internal Australian market and also exports raw milk to Asia.

Many of WCB’s farmer shareholders are concerned about ensuring a continuing outlet for their milk and that the market does not become overly dominated by two to three main milk buyers.

Three firms are fighting for control of WCB – Saputo, Murray Goulburn and Bega Cheese.

difficulties

Canadian firm Saputo currently has tabled the highest offer at Aus$7 per share but the issue of selling such a major dairy firm to a foreign buyer may pose difficulties.

Murray Goulburn, Australia’s largest dairy exporter, is attracted to WCB, given the many consolidation opportunities that would exist between both firms.

Last, but by no means least, Bega Cheese executive chairman Barry Irvin also remains confident of securing the required 50% shareholder support for this deal.