KEY POINTS:
A Singaporean company has bought a 17 per cent stake in dairy exporter Open Country Cheese.
The move comes amid a takeover tussle for Open Country by Affco-offshoot Dairy Trust, which has so far secured about 44 per cent out of the 50.1 per cent shares it needs for the offer to succeed.
Olam International's purchase brings its holding in Open Country to 19.9 per cent, just short of the point where it too would have to make a takeover offer.
"We saw an opportunity of taking a stake without the need of having to make a general offer," spokesman S. Suresh said.
But while Dairy Trust's scrip-only offer values Open Country at $2.25 a share, Olam has paid the significantly higher figure of $3.20, which lies within the valuation range suggested by independent adviser Ferrier Hodgson last week. "Our purchase price is well above the offer made by [Dairy Trust]," said Suresh.
However, he insisted the price was not based on the independent adviser's report - which valued Open Country shares at between $3.10 and $3.47. "It is based on our own internal estimates."
The move was "of strategic importance for our dairy business" as "New Zealand is an important cost-effective producer of dairy products".
Olam, an agricultural commodities company, describes dairy as its fastest-growing portfolio and has sought to secure supply from Argentina and Ukraine in the past three years to supply markets such as Africa, Russia and China.
"This will give us a good foothold in Australasia and, being close to large markets like China, it will help our strategy in growing our dairy business."
Suresh would not say how long Olam had been considering the move on Open Country and would not rule out more opportunities here.
Wyatt Creech, an independent director of Open Country, said he had been informed by Macquarie, who had brokered the purchase, that Olam was unrelated to the Dairy Trust group, and that he would be speaking to the company next week.
Andrew Talley, the OCC director spearheading Dairy Trust's takeover bid, which has been extended to June 30, said he was unaware of Olam's intentions and would not be able to comment until they became apparent.
