Bega invests in honey
DAIRY company Bega Cheese appears to be heading to the land of milk and honey, buying an 11.2 per cent stake in honey producer Capilano.
In three weeks to the end of September, Bega Cheese increased its shareholding from 8.39 per cent to 11.24 per cent.
It began buying small parcels of shares at about $16 apiece from May to August 13, when Capilano announced it was entering into a scheme implementation arrangement with HoldCo.
HoldCo is jointly owned by private equity fund Wattle Hill RHC and investment manager ROC Capital.
Wattle Hill’s founding partner is Albert Tse, husband of Jessica Rudd, daughter of former Prime Minister Kevin Rudd.
The aim of scheme was to take Capilano from the Australian Securities Exchange to be a private company.
The proposal would have HoldCo acquire all the shares in Capilano for $20.06 each.
Alternatively, Capilano shareholders also have the option of acquiring a stake in the new company through a scrip offer allowing them to acquire 0.5 HoldCo shares for each Capilano share at a price equivalent to $20.06.
That is subject to a rounding and scale back mechanism.
Capilano will take the HoldCo scheme to a vote of shareholders in November.
ASX documents show Bega Cheese began substantially increasing its stake in Capilano from August 13, when the HoldCo scheme was announced.
Bega Cheese bought shares at prices up to $21 apiece during late August and September.
It is not clear whether Bega Cheese is gearing up for a counter bid or a large enough stake to vote down the scheme arrangement in November.
Bega Cheese chief executive officer Paul van Heerwaarden would not comment on the dairy company’s plans, other than to say it had an interest in the sector.
“We have previously indicated we are interested in further acquisitions in groceries,” Mr van Heerwaarden said.
An industry source said honey would make a “pretty good addition” to Bega Cheese’s range of spreads.
“It gives you synergies in marketing and cross marketing,” he said.
SWEET REWARDS: Bega Cheese has bought a stake in honey company Capilano.