TALK was rife in industry circles last week that Chinese dairy heavyweight Yili may be set to make a formal offer for Australia’s biggest milk processor Murray Goulburn.
However while both firms have confirmed expressions of interest, both have hosed down rumours of a price for Unit Trust shares.
Here’s whar MG had to say:
“Murray Goulburn Co-operative Co. Limited (MG) notes recent media speculation regarding its previously announced strategic review.
“MG confirms that it has received a number of confidential, non-binding indicative proposals. These proposals have ranged from the sale of certain assets to whole of company transactions.
“No offer has been received for the units in MG Unit Trust for $1.20 per unit, as speculated in the media.
“MG and its financial advisor Deutsche Bank AG are engaging with a number of parties to assess their proposals, including valuation.
“At this point it is too early to make any comment about valuation or implementation. MG notes there is no certainty that any transaction will eventuate.
Meanwhile in a statement to the Shanghai Stock Exchange last Thursday, Yili has only submitted a cautious, non-binding proposal in relation to Murray Goulburn.
Shares in Murray Goulburn’s listed entity, the MG Unit Trust, yesterday dipped 1.7 per cent to 87c in the wake of the announcements.
A buyout from Yili, which makes milk products for the Chinese market, would need to be approved by the Foreign Investment Review Board.
Other offshore interest could come from China’s Fuyuan Farming, New Zealand dairy titan Fonterra and Canada’s Saputo, which is the owner of Warrnambool Cheese and Butter. Australia-listed Bega Cheese, which in January bought Vegemite from US food giant Mondelez in a $460 million deal, is also rumoured to be running the rule over Murray’s assets.
In the year to June, Murray Goulburn suffered a writedown-affected net loss of $370.8 million, down from a $39.8 million profit a year earlier.