WCB announced to shareholders on June 10 that it would issue three shares for every eight held in the company through a renounceable entitlement offer.
Extra shares are able to be bought at $6.75 a share — well below the closing price of $8.25 apiece on June 9 and the $9.40 Canadian dairy company Saputo Inc paid to take a majority 87.9 per cent controlling stake in the Warrambool business.
WCB said the potential $142 million generated from the share offer would be used to repay debt but also invest in strategic capital investments, such as cheese and other dairy manufacturing operations.
Minority shareholder Sandon Capital Investments Limited objected to the WCB move, saying it was being “inappropriately used as a mechanism to enable Saputo Dairy to proceed to compulsory acquisition of the remaining Warrnambool shares”.
Sandon Capital has applied to the Takeovers Panel to consider its objection and stop the WCB entitlement offer from proceeding.
The Takeovers Panel has yet to decide whether to form a panel to hear the matter.
Lion holds 5.7 million shares in WCB, or 10.22 per cent of the company — enough to block a full takeover by Saputo Inc.
It would cost Lion more than $14.5 million to maintain its 10 per cent blocking stake in WCB.
A number of smaller shareholders collectively own 750,000 WCB shares, or 1.8 per cent of the company.
Saputo has already announced it would take up its full entitlement of 18.5 million extra shares in WCB under the entitlement offer.
WCB said if Lion did not take up its full entitlement offer, Saputo would move to more than 90 per cent of WCB.
That would be enough to trigger compulsory acquisition of all shares Saputo did not already own and the final play to get total control of the Warrnambool dairy manufacturer after failing to miss out two years ago.
A Lion spokeswoman said her company would not be commenting on the entitlement offer.
Shareholders have until 5pm tomorrow to take up the WCB offer.
Extra shares are able to be bought at $6.75 a share — well below the closing price of $8.25 apiece on June 9 and the $9.40 Canadian dairy company Saputo Inc paid to take a majority 87.9 per cent controlling stake in the Warrambool business.
WCB said the potential $142 million generated from the share offer would be used to repay debt but also invest in strategic capital investments, such as cheese and other dairy manufacturing operations.
Minority shareholder Sandon Capital Investments Limited objected to the WCB move, saying it was being “inappropriately used as a mechanism to enable Saputo Dairy to proceed to compulsory acquisition of the remaining Warrnambool shares”.
Sandon Capital has applied to the Takeovers Panel to consider its objection and stop the WCB entitlement offer from proceeding.
The Takeovers Panel has yet to decide whether to form a panel to hear the matter.
Lion holds 5.7 million shares in WCB, or 10.22 per cent of the company — enough to block a full takeover by Saputo Inc.
It would cost Lion more than $14.5 million to maintain its 10 per cent blocking stake in WCB.
A number of smaller shareholders collectively own 750,000 WCB shares, or 1.8 per cent of the company.
Saputo has already announced it would take up its full entitlement of 18.5 million extra shares in WCB under the entitlement offer.
WCB said if Lion did not take up its full entitlement offer, Saputo would move to more than 90 per cent of WCB.
That would be enough to trigger compulsory acquisition of all shares Saputo did not already own and the final play to get total control of the Warrnambool dairy manufacturer after failing to miss out two years ago.
A Lion spokeswoman said her company would not be commenting on the entitlement offer.
Shareholders have until 5pm tomorrow to take up the WCB offer.
Source: WeeklyTimes
http://www.weeklytimesnow.com.au/agribusiness/dairy/claims-saputo-inc-in-inappropriate-play-for-control-of-warrnambool-cheese-and-butter/news-story/0d468a6a139f26c898754cc90536a6c2