Bega Cheese is expected to raise up to $400 million to fund its purchase of Japanese drinks giant Kirin’s Lion Dairy and Drinks.
Street Talk understands Bega will launch the offer later this week provided it completes negotiations with Kirin to buy the flavoured milk and yoghurt business.
The discussions were ongoing as of Monday morning.
The raising is expected to be split between a $180 million placement and $220 million accelerated non-renounceable entitlement offer and will partially fund the acquisition, which is tipped to be worth around $550 million.
Kidder Williams has been advising Bega on the Lion purchase and is expected to help handle the raising. Stockbroker Bell Potter also won’t be too far away, it helped out on Bega’s most recent offer, which was in 2018.
Bega entered Lion’s «black box» data room over the weekend, beating out Canadian dairy giant Saputo and a consortium spearheaded by Tanarra Capital to get access to Lion Dairy’s most tightly held secrets.
Entering the final data room is the last step before sealing an acquisition.
Lion’s dairy and drinks division includes Australia’s only national cold chain distribution network, which deliver its products, including milk-based drinks, yoghurts and juices.
The fact that Bega and Kirin were close to reaching an agreement would be a relief to the Japanese drinks giant, which has been trying to offload the division for the best part of two years.
It reached a $600 million deal with China Mengniu Dairy in November last year but that deal was stopped at the last minute by Treasurer Josh Frydenberg on national interest grounds.