Bega Cheese has decided to sell its 18.8 percent stake in Warrnambool Cheese and Butter (WCB) to Canadian firm and front-runner in the bidding war, Saputo.
According to weeklytimesnow, Bega said selling its shares would deliver a windfall profit of at least $61.8 million.
Bega kicked off the bids for Warrnambool Cheese and Butter, the board of which has expressed its support for Saputo’s $9 per share offer. With Bega’s shares, Saputo will have a more than 45 percent stake in the company.
Barry Irvin, executive chairman of Bega, said selling the shares was a responsible business decision, and that the company didn’t want to run the risk of WCB’s share price dropping after the Australian Competition Tribunal delivers its findings on Murray Goulburn’s bid.
“With the Saputo offer closing we couldn’t wait until the outcome from the (Australian) Competition Tribunal, it’s uncertain.
“At the end of the day it is a very large amount of money for our stake in WCB,” Irvin said.
Bega also announced today that its preference is for WCB to remain in Australian hands, but its sale to Saputo seriously weakens Murray Goulburn’s attempts for a takeover.
Earlier this month, Saputo increased its stake in WCB from just over 18 percent to 20.14 percent, making it the largest shareholder.