Saputo says it has 13.55 per cent of Australian diary it wants to acquire

MONTREAL – Saputo says it has increased its stake in Australian dairy processor Warrnambool Cheese and Butter to 13.55 per cent, up from 4.8 per cent last week.

The Canadian company advised the Australian Stock Exchange that it has nearly 7.6 million shares in the company it is seeking to buy.

It wasn’t immediately clear if Saputo (TSX:SAP) will be able to accept the additional shares because a regulator placed an interim order preventing it from processing acceptances until its bid is investigated.

Rival Murray Goulburn Co-operative had applied to the Australian Takeovers Panel to block Saputo’s efforts for up to two months.

It alleged that Warrnambool’s shares traded for a period in November based on “misinformation as to the terms of the Saputo bid” because of Warrnambool’s decision to no longer pay up to AU$1.31 per share in special dividends.

That means shareholders can’t access 56 cents per share in “franking” or tax credits from Saputo’s earlier offer.

Last week, Saputo raised its offer to AU$9.20 per Warrnambool share if it gets majority ownership, or AU$9 if it doesn’t get more than half of the Australian company’s stock.

Murray Goulburn responded by hiking its all-cash bid to AU$9.50 per share but retained two key conditions — getting approval from Australian competition authorities and obtaining a majority of Warrnambool stock.

The company filed a request for approval from Australia’s competition tribunal on Nov. 29, a process that could take three to six months.

Warrnambool said it was reviewing Murray Goulburn’s offer and a non-confidential version of the application to determine the likelihood of whether it will be able to remove a key condition of its bid and complete the transaction.

Public hearings by the competition tribunal are expected to begin Feb. 10. Warrnambool said it will seek to be declared an interested party and participate in initial meetings next week.