UPDATE 2-Kingmaker Bega claims spoils in Australia 'dairy wars'

Thu Jan 16, 2014 5:05am EST
 
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* Bega books cash windfall on sale of Warrnambool stake

* Canada's Saputo primed to take control of Warrnambool

* Bega considering product development, acquisitions

By Jane Wardell

SYDNEY, Jan 16 (Reuters) - Bega Cheese Ltd will walk off with a pile of cash and a kingmaker role in Australia's "dairy wars" after virtually handing control of the country's oldest milk and cheese producer to a Canadian suitor.

Bega agreed on Thursday to sell its 18.8 percent stake in takeover target Warrnambool Cheese and Butter Factory Holdings Co to Saputo Inc. That effectively ends a takeover battle Bega itself started last year but abandoned as bids spiralled.

With the dust about to settle on one Australia's most intense bidding wars in years, Bega now has a A$70 million ($62.5 million) windfall, wiping out debt and freeing up funds for new products or acquisitions.

Its position of strength, along with company statutes that would deter bidders, also means it hopes to stay independent even if international suitors call in what has become one of Asia's hottest food and drink sectors.

The intensity of the struggle for Warrnambool - nine bids or counter-bids since last September - reflects huge interest in Australia's agriculture assets amid surging demand from increasingly affluent southeast Asia for both high-tech milk extracts and traditional dairy products.   Continued...