Goodman Fielder, makers of Meadow Fresh milk and yoghurt, Puhoi Cheese and Tararua cream, has described the takeover bid by Wilmar International as “opportunistic”.
Goodman Fielder, listed on Australian and New Zealand stock exchanges, says the offer of A65c/share undervalues the company.
Singapore-listed Wilmar, one of the biggest agribusiness groups in Asia, already owns 10.1% of Goodman Fielder. Its bid is supported by First Pacific, a Hong Kong-listed investment company.
In a statement to NZX, Goodman Fielder revealed it had received “a non-binding, highly conditional proposal” takeover bid.
The proposed scheme is conditional on, among other things, due diligence, unanimous recommendation by Goodman Fielder board, and approval by the boards of Wilmar and First Pacific. Both bidders have requested exclusivity in relation to the proposal.
Goodman Fielder says its board carefully considered the proposal, together with its advisers, and met representatives of Wilmar and First Pacific late last month.
“The board believes the current proposal materially undervalues Goodman Fielder and is opportunistic. The
board has advised Wilmar and First Pacific accordingly.”
It says the board remains focused on maximising shareholder value. It also remains committed to Project Renaissance, a plan to cut annual costs by A$100 million by 2015. The company says staff reduction over the next few months will save the company A$25m.
It says a strategic review maximising the value of its New Zealand Dairy business is underway.
In a trading update filed with NZX last month, Goodman Fielder says the high farmgate milk price of $8.65/kgMS will impact earnings in the short term.
The company says it has notified customers of price increases, however there is a time lag between the increase in the raw milk price and cost recovery.
Goodman Fielder buys 250 million of litres of milk from Fonterra annually under the Dairy Industry Restructuring Act (DIRA). It competes with Fonterra’s Anchor brand fresh and UHT milk in the local market.
Fonterra also does business with Wilmar, a major supplier of PKE. Fonterra subsidiary RD1 buys all its PKE from Wilmar.
