Wilmar, First Pacific sweeten Goodman bid by A$100 mln, won't go higher without rival offer

Friday 16th May 2014

Singapore-based Wilmar International and Hong Kong-listed investment firm First Pacific Co have sweetened their takeover bid for Australasian food ingredients maker Goodman Fielder by A$100 million, but won't go any higher without a rival offer.

Wilmar, the world's biggest palm oil processor, and First Pacific are offering to pay 70 Australian cents a share, or A$1.37 billion, for full control of Goodman, up from a previous bid of 65 cents, or A$1.27 billion, they said in separate statements today. The bid is a 4.1 percent premium to Goodman's last trading price of 67.2 Australian cents on the ASX. Goodman's board has until Friday night to open its books for due diligence and recommend the deal. The dual-listed shares were halted in New Zealand and Australia yesterday.

"The company and First Pacific will not increase the price further in the absence of a competing proposal," Wilmar said.

The Asian companies are seeking to buy Goodman through a scheme of arrangement, meaning they only need 75 percent support to take control rather than the 90 percent target for a hostile takeover.

Goodman's board knocked back their earlier offer as opportunistic and materially undervaluing the company.

Wilmar bought a 10 percent stake in Goodman in 2012, and registered interest in the food ingredients maker's assets which were up for sale at the time.

In February, Goodman forecast normalised annual earnings to be "broadly in line" with the previous year's A$185.6 million as soaring milk prices and intense competition in baking goods eroded profitability.

The maker of household brands including Vogel's bread, Meadowfresh milk and yoghurt, and Meadowlea butter and margarine has been cost cutting, restructuring and divesting over the past three years, to focus on its core brands and reduce debt.

BusinessDesk.co.nz

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