Murray Goulburn: Bega Cheese may lead race for dairy co-operative

But for several reasons, Bega Cheese as a winning bidder is probably about as palatable as could be for all stakeholders in this long-running saga — and probably the easiest to achieve.

Bega Cheese has made no secret of its interest in Murray Goulburn.

Only last week, when Bega’s 2016-17 results were announced, executive chairman Barry Irvin again promoted his dream of a stronger dairy business involving MG.

Three years ago, Mr Irvin led the bidding for Warrnambool Cheese and Butter with a cash and share offer. Canadian dairy company Saputo eventually outbid both Bega and, ironically, MG, after one of the most extraordinary Australian corporate battles in recent history.

Bega should be in the box seat for a bid for MG, particularly if it comes up with a cash and share offer.

In Mr Irvin’s favour is the fact that foreign bidders for MG will need Foreign Investment Review Board approval.

Then there is the complicated issue of getting around MG’s structure of having units listed on the Australian Securities Exchange and shares owned by about 3000 dairy farmers.

Bega would have to offer a mix of its shares and cash at an attractive price to win over the long-suffering MG security holders.

Getting over the 90 per cent approval hurdle under its complicated company structure becomes a bit easier if dairy farmers see MG linking up with another Australian company.

A successful deal will also give Bega sufficient size to become an Aussie food icon.


Source: The Weekly Times


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