UPDATE 1-Australia govt allows Saputo's $420 mln bid for WCB

Mon Nov 11, 2013 5:54pm EST
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* Treasurer Hockey approves without conditions Saputo to bid for WCB

* Saputo in 3-way battle for WCB with Bega, Murray Goulburn

* Approval on WCB no guarantee on ADM's bid for GrainCorp - analyst (Adds analyst comment, detail on AND/GrainCorp deal)

SYDNEY, Nov 12 (Reuters) - Australia said on Tuesday it would allow Saputo Inc to bid for Warrnambool Cheese and Butter Factory Holdings Ltd, removing a key obstacle for the deal aimed at consolidating the country's dairy industry as global demand surges.

Saputo, Canada's largest dairy producer, hiked its bid for WCB by 14 percent to A$449 million ($420 million) in October, trumping earlier approaches by major shareholders Bega Cheese Ltd and Murray Goulburn Co-operative Co Ltd.

"The future ownership of (WCB) is ultimately a matter for the shareholders but this decision provides certainty in relation to Saputo's bid," Australian Treasurer Joe Hockey said in a statement announcing his unconditional approval.

"Australia is open for business and we welcome foreign investment when it is not contrary to the national interest."

WCB is being chased for its export connections to Asia, where demand for both for its basic dairy produce and its high-tech milk extracts is rising strongly.

Saputo's bid, valuing WCB at A$8 per share, has been unanimously recommended by the WCB board.   Continued...