Saputo has lodged a proposed undertaking with the ACCC in respect of a divestment plan for Murray Goulburn’s Koroit dairy plant.
This is in order to address ACCC concerns on competition for the acquisition of raw milk in south-west Victoria and south-east South Australia and to obtain the ACCC clearance.
The proposed divestment of the Koroit dairy plant by Saputo does not have any impact on the terms of the Asset Sale, including the consideration to be received by MG from Saputo and Saputo’s previously announced milk supply commitments.
On this basis, as the Asset Sale remains subject to an ordinary resolution of MG’s voting shareholders, MG intends to issue and despatch its Explanatory Memorandum and Notice of Meeting on 14 March 2018, to convene an Extraordinary General Meeting (EGM) to be held in Melbourne on Thursday, 5 April 2018.
Murray Goulburn Directors intend to convene the EGM on the basis that the ACCC will accept the divestment proposal provided by Saputo and that ACCC clearance will be granted prior to the scheduled EGM date. If clearance from the ACCC has not been granted by the business day immediately prior to the scheduled EGM date, MG expects to postpone the EGM. Until clearance is received, the transaction will remain conditional on ACCC approval.
Revised estimated net value per share/unit
MG advises that following the completion of MG’s reviewed 1H18 accounts and the preparation of an updated management forecast for the remainder of FY18, its estimate of the net value per share/unit which Shareholders and Unitholders could receive from the Asset Sale over time has been increased.
There is no change to the acquisition price of approximately $1.31 billion[1] to be paid by Saputo. The revision in estimated net value per share/unit reflects MG’s expectation of lower debt levels at the completion of the Asset Sale.
This is a result of lower capital expenditure given the reduction in MG’s milk intake and improved outcomes against previous assumptions for the sale of Edith Creek. MG has also reduced its estimated operating costs for MG post completion.
-MG