CHINESE FIRM IN LATEST BID FOR MURRAY GOULBURN
A CHINESE dairy juggernaut has swooped on Australia’s biggest milk processor, Murray Goulburn Cooperative, lobbing a buyout offer for the group, sources say.
Yili, a private company that makes milk products for the Chinese market, is rumoured to the be in the box seat for the struggling cooperative after tabling a substantial offer.
Confirming last month that it had slumped into the red during the year to June, Murray Goulburn also revealed it had fielded buyout bids and offers for some of its assets.
According to market sources, a string of suitors have made bids for the group ahead of an unofficial deadline for offers tomorrow.
A buyout at the hands of an offshore group such as Yili would face scrutiny from Australia’s Foreign Investment Review Board.
Industry experts say any deal would likely need the backing of 90 per cent of Murray Goulburn’s farmer suppliers under its co-operative structure.
As such, the government would be unlikely to overturn a deal even if the review board had concerns, they say.
Other bidders are said to include the Australian-listed dairy company Bega Cheese, Chinese group Fuyuan Farming, New Zealand dairy processing titan Fonterra and Canadian heavyweight Saputo, which already owns Warrnambool Cheese and Butter.
Italian dairy titan Parmalat, Japan’s Lion, Singaporeowned Goodman Fielder and New Zealand’s A2 Milk – which is also listed on the Australian Securities Exchange – are rumoured to be among those courting Murray Goulburn, too.
At its results announcement last month, Murray Goulburn chief Ari Mervis said the company had hired Deutsche Bank to seek more detailed proposals from suitors “to assess the merits of such proposals”.
Mr Mervis said the board would act in the interest of suppliers, shareholders, and its unitholders. It was critical any deal led to higher prices for dairy farmers and eased access to capital, he said.
“The coming months will be pivotal for the future of the business as the board and management finalise substantial business improvement programs and third parties are given an opportunity to submit formal proposals,” Mr Mervis said.
In the year to June, Murray Goulburn suffered a net loss of $370.8 million, compared with a $39.8 million profit a year earlier.