Goulburn joins Warrnambool bidding war

The biggest Australian milk processor, Murray Goulburn Cooperative Co., has joined a bidding war for Warrnambool Cheese & Butter Factory Co., making a bid valued at A$420 million ($404 million), offering $7.50 per share.

This beats Canadian diary giant Saputo's $7 a share offer and Bega Cheese's offer, which would see Warnabool Cheese shareholders receive 1.2 Bega shares plus $2 cash.

Phillip Tracy, Murray Goulburn chairman, said that the proposed takeover will create one of the largest Australian-owned food and beverage businesses, worth annual revenues of more than $3.2 billion.

Warrnambool said in a statement that its directors would meet shortly to consider the Murray Goulburn offer and that it had been unaware of the cooperative's intentions until Friday. Its shares hit a record high of A$7.98 and closed up 6 per cent at A$7.89. They have gained 75 percent since the Bega offer.

Saputo, could increase its offer for Warrnambool while for Murray Goulburn price does not seem to be an issue, just that they want a base in Australia.

Buying Warrnambool, which also supplies milk to make Philadelphia cream cheese, would give Murray Goulburn control of a neighboring processor and key export infrastructure, Managing Director, Gary Helou, told in a conference call.

Murray Goulburn, which is being advised by Lazard Ltd, holds 17 per cent of Warrnambool while Bega Cheese holds 18 per cent.

''This is an historic opportunity for Murray Goulburn and WCB suppliers and shareholders to create a larger scale, globally competitive Australian dairy food company owned and controlled by Australian dairy farmers,'' Murray Goulburn Chairman Philip Tracy said in a statement.