Murray Goulburn’s Chairman John Spark said the Saputo transaction represented the best available outcome for suppliers and investors.- “Saputo is one of the top ten dairy processors in the world and active in Australia through its ownership of Warrnambool Cheese & Butter (WCB),” Mr Spark said.
- “This transaction will crystallise real value for MG’s equity, whilst rewarding our loyal suppliers through the milk supply commitments.”
- Saputo is to acquire all of the operating assets and operating liabilities of MG for approximately $1,310 million.”
- Transaction includes MG milk supply commitments for Active MG Suppliers2 totalling approximately $114 million enabling:
- – A step up of $0.40 per kilogram milk solids (kgMS) to $5.60 per kgMS for the FY18 FMP3 for milk
supplied from 1 November 2017 and, on completion of the Transaction, for milk supplied from July
to October 2017; and
- – An additional $0.40 per kgMS loyalty payment in FY18 for Active MG Suppliers
- – A step up of $0.40 per kilogram milk solids (kgMS) to $5.60 per kgMS for the FY18 FMP3 for milk
- Active MG suppliers will also benefit from a series of commitments from Saputo ensuring milk collection and market pricing into the future
- Estimated net value per share/unit of $1.10 to 1.154 after working capital adjustment and other costs, representing a 76– 84% premium to the undisturbed unit price5
- Estimated initial distribution of approximately $0.75 per share/ unit to be paid shortly after completion (expected to be in the first half of calendar 2018)
- MG to retain all assets and liabilities associated with the MG Unit Trust and any liability in relation to the current ACCC proceedings, ASIC investigation and unit holder class action (and any similar such actions). For this reason MG will retain part of the proceeds of the Transaction until the conclusion of these matters. Further cash distributions will be made following such conclusion, or earlier if appropriate
- The Transaction is subject to approval by an ordinary resolution of MG’s voting shareholders6 and other customary conditions including ACCC and FIRB approvals
“MG has reached a position where, as an independent company, its debt was simply too high given the significant milk loss. Securing a sustainable future for MG’s loyal suppliers is of paramount importance to the Board,” Mr Spark said.
“We are pleased with the strong milk commitments secured as part of Saputo’s offer to reward this loyalty. Saputo has demonstrated itself to be a credible and trusted partner for Australian dairy farmers through its investment in WCB. The Transaction has the unanimous support of the MG Board.”