MELBOURNE - Murray Goulburn Cooperative said yesterday that it had refused to accept terms set by Bonlac Foods for reviewing its books so that it could solidify a takeover offer which valued its smaller rival at $A880 million ($1.074 billion).
"The company was not in a position to proceed because of
the terms demanded by the board of Bonlac," Murray Goulburn chairman Ian MacAulay said.
Murray Goulburn still plans to pursue its offer, which includes $A70 million in cash and assumption of Bonlac's $A560 million in debt.
It is up against a tight timeframe as it aims to land a firm offer before Bonlac's members vote on April 23 on a longstanding merger plan with New Zealand Dairy Board.
"We must be able to confirm that the expanded cooperative can deliver improved milk prices to its members. Otherwise there is no point proceeding," Mr MacAulay said.
Bonlac waived a condition of its plan with the New Zealand Dairy Board, barring another suitor to run due diligence.
But it wanted to give Murray Goulburn one week less than it sought to pore over its books, and refused to allow MG to talk to its 2800 farmer members, a Murray Goulburn spokesman said.
Murray Goulburn's offer includes paying Bonlac's milk suppliers more than they get now, keeping Bonlac's milk and ingredients plants, and selling its cheese and butter brands to National Foods, Australia's only listed dairy processor, for about $A250 million.
National Foods, whose shares have fallen 36 per cent to $A2.18 since Australian milk prices were deregulated last July, is eager for the deal to go ahead after having failed in two attempts to lead consolidation in the local dairy industry.
The New Zealand Dairy Board, offering to pay $A80 million for a 25 per cent stake in Bonlac and set up a cheese and butter joint venture, said it saw no problem in allowing Murray Goulburn to put its offer on the table.
"We are perfectly happy for due diligence to take place because we are very confident ours is the right offer," said New Zealand Dairy Board spokesman Neville Martin.
- NZPA
