Shares in Australia dairy takeover target WCB surge to record high
SYDNEY Oct 29 (Reuters) - Shares in Warrnambool Cheese and Butter Factory Company Holdings Ltd (WCB) surged as much as 11 percent to a record high in heavy trade on Tuesday, fueling expectations of a new takeover bid for the Australian dairy company.
WCB has been the subject of a fierce bidding war, with Saputo Inc, Canada's largest dairy producer, last week raising its bid to A$449 million ($429.63 million), trumping separate approaches from WCB's two largest shareholders, Bega Cheese Ltd and Murray Goulburn Co-operative Co Ltd.
WCB shares hit a peak of A$9.30 and last traded up 6.7 percent at A$8.92. More than 5.9 million shares, or some 10 percent of the company, changed hands on Tuesday.
WCB noted the heavy trade in a statement to the Australian Stock Exchange, but said it was not aware of the reason for the unusual activity and said it was in compliance with its disclosure obligations.
Australian dairy and farm assets are attracting increased interest as companies ramp up their exposure to Asia's growing appetite for milk, cheese and other food products.
Analysts said the activity suggest a new offer from existing bidders, or a fresh rival bid, was possible.
"We're now 15 percent above Saputo's bid and that would suggest there would have to be another offer coming and coming soon," said Evan Lucas, a strategist at IG.
New Zealand dairy giant Fonterra Co-operative Group and Kirin Holding's Australian unit Lion Nathan Ltd were mentioned as possible new bidders.
Fonterra said it had appointed Reunion Capital Partners to advise it on "the current corporate activity in the dairy sector", but declined to comment on its possible involvement in a bid for WCB. Continued...