Regulator orders two-month pause on Saputo's bid for Aussie firm

MONTREAL—Saputo’s bid to buy Australia’s oldest dairy processor hit a snag when a regulator issued a temporary order that stops the Canadian company from adding to its holdings for up to two months.

According to figures released in Australia, Saputo has accumulated 9.6 per cent of the shares in Warrnambool Cheese and Butter since the two sides reached a friendly takeover agreement.

Saputo has since revised its offer following increasingly higher bids from two Australian rivals, especially a tenacious campaign by the Murray Goulburn Co-operative—Australia’s largest dairy producer.

Earlier this week, Saputo offered to pay up to AU$9.20 per Warrnambool share if it gets majority ownership, or AU$9 if it doesn’t get more than half of the Australian company’s stock.

Murray Goulburn responded by hiking its all-cash bid to AU$9.50 per share but retained two key conditions—getting approval from Australian competition authorities and obtaining a majority of WCB.

The Australian Takeovers Panel agreed to Murray Goulburn’s applications to prevent Saputo from processing share tendered under its bid for two months, or until it makes a final order.

However, the regulator said the interim order doesn’t mean that it has decided to conduct proceedings or has ruled on Murray Goulburn’s application.

The takeover panel’s move effectively buys Murray Goulburn some time as it seeks approval from Australia’s competition tribunal, a process that could take up to six months.

Murray Goulburn also wants Warrnambool to reinstate special dividends so some shareholders can obtain tax credits under its revised offer.

Saputo removed this feature from its last offer.

The Murray Goulburn offer values Warrnambool at AU$532.9-million—nearly AU$17-million more than Saputo’s highest offer.