Warrnambool Cheese and Butter is considering Bega Cheese’s takeover bid

Bega Cheese has offered 1.2 Bega shares plus $2.00 cash for every Warrnambool Cheese and Butter (WCB) share. If this $319 million takeover succeeds it will create one of Australia’s largest listed food companies.

It is anticipated that the combined company would generate revenue of $1.5 billion annually and provide employment for around 2000 in regional Australia.

Processing 1.6 billion tonnes of milk, the combined company would produce 353,000 tonnes of dairy products across seven sites.

WCB’s CEO/Managing Director, David Lord, recommended that shareholders take no action in response to Bega’s offer as the offer must remain open for at least one calendar month from when it opens (which can be no earlier than 14 days after September 12) so WCB shareholders will have ample time to make a decision.

WCB has appointed Minter Ellison and CIMB Corporate Finance (Australia) Limited to advise in respect of the Offer and to assist WCB’s directors to evaluate and respond to the Offer.

Barry Irvin, Bega executive chairman, claimed that the synergy realised by merging the two companies is worth about $7.5 million each year.