WCB board rejects Bega's takeover offer

Warrnambool Cheese and Butter’s (WCB’s) board of directors has recommended that the company reject Bega Cheese Limited’s takeover offer.

Bega had offered WCB’s shareholders 1.2 Bega shares plus $2 cash for every WBC share. If the $319 million takeover were to go ahead, it would create one of Australia’s largest listed food companies.

The WCB board said the offer is inadequate and does not reflect fair value for WCB shares and is timed to exploit recent gains in Bega’s share price.

In response to the Bega offer, WCB has engaged PricewaterhouseCoopers to complete an Investigating Accountant’s Report into the FY14 earnings forecast, which will be included in WCB’s Targets Statement. WCB shareholders will receive a Targets Statement with WCB’s formal response to the Bega offer in mid-October.

“The WCB board remains committed to maximising value for shareholders and improving the livelihood of its suppliers and will focus on continuing to implement its strategic plan,” the board said in a statement.

“As Australia’s oldest dairy processor, thanks to the support of its shareholders, suppliers, staff, customers and the community, WCB has grown to become a leading innovator of dairy products and a strongly positioned competitor in the domestic and international dairy markets.”

WCB sought advice from Minter Ellison as legal adviser and CIMB Corporate Finance as financial adviser on the matter of Bega’s proposal.