UPDATE 1-Australia's WCB shares fall as Kirin takes king-making stake

Tue Oct 29, 2013 9:34pm EDT
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* WCB shares fall 5 pct, Bega stock up 4 percent

* Saputo plans to invest in new capacity, products

* Lion's blocking stake makes WCB investors nervous (Recasts and adds analysts comments)

By Jane Wardell

SYDNEY, Oct 30 (Reuters) - Australia's Warrnambool Cheese and Butter Factory Company Holdings Ltd shares fell on Wednesday after Japan's Kirin Holdings Co Ltd bought itself a king-making stake that could block a $430 million takeover bid by Canada's Saputo Inc.

Kirin, which made the purchase of the 10 percent stake through its unit Lion, is not expected to make a full bid for WCB, but use the stake to shore up its existing supply agreement with the company.

It may effectively be able to choose a winner in the bidding war for WCB. Saputo's A$449 million bid has trumped separate approaches from WCB's two largest shareholders, Bega Cheese Ltd and Murray Goulburn Co-operative Co Ltd.

Bega owns about 18 percent of WCB and Murray Goulburn owns 17 percent. If the two banded together with Kirin, they would have just shy of 50 percent, enabling the group to block Saputo's bid.

The international tussle over WCB highlights the strong demand for Australian dairy assets and their exposure to rapidly growing markets in Asia.   Continued...