Bega Cheese has pulled out of the three-way battle for control of Warrnambool Cheese and Butter.
The other Australian player in the fight, meanwhile, says it still has the best takeover offer, despite Canadian dairy giant Saputo sweetening its bid.
Bega Cheese, which started the bidding war in September, will let its bid lapse when its offer period closes on December 20.
Bega owns almost 18 per cent of Warrnambool shares, and said it would consider its options regarding that stake once its offer closes.
Murray Goulburn said on Wednesday its offer of $9.50 for each Warrnambool share “remains the highest current value offer” for Warrnambool’s shareholders, before accounting for any increases in price that depend on certain ownership thresholds.
Saputo on Tuesday maintained its offer of $9.00 but has increased the amount it will pay if certain share thresholds are met. The bid is final.
Saputo’s offer will rise to $9.20 if it gets more than 50 per cent of Warrnambool’s shares, $9.40 if it gets more than 75 per cent, and $9.60 if it obtains more than 90 per cent.
Murray Goulburn said there was a significant risk Saputo would not achieve the 50 per cent, 75 per cent or 90 per cent ownership level required to trigger its offer increases.
“This risk is heightened due to the presence of a number of industry participants on WCB’s share register, who currently own approximately 46 per cent of WCB in total,” Murray Goulburn said.
As well as Bega Cheese’s holding, Murray Goulburn has over 17 per cent, and Kirin-owned Lion about 10 per cent.
Saputo currently has nearly 17 per cent but WCB shareholders who accepted the Saputo offer before December 17 have withdrawal rights.
Murray Goulburn’s bid of $9.50 is conditional upon it obtaining more than 50 per cent of Warrnambool shares.
It has also filed an application with the Australian Competition Tribunal for authorisation to merge with Warrnambool on the grounds that a merger would be of public benefit.
The tribunal is expected to make a decision by the end of February.
Murray Goulburn managing director Gary Helou has urged Warrnambool shareholders to wait until the outcome of the merger application authorisation so that Murray Goulburn’s offer can be considered on its merits.