Bega in­vests in honey

Warwick Daily News - South West Queensland Rural Weekly - - My Smoko Break - Peter Hem­phill news@ru­ral­weekly.com.au

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.

PHOTO: MIKE RICHARDS

SWEET RE­WARDS: Bega Cheese has bought a stake in honey com­pany Capi­lano.

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