UPDATE: Goodman shares soar 23% on Wilmar, First Pacific takeover bid
(Updated with share price movement, investor comment)
By Paul McBeth
April 28 (BusinessDesk) - Goodman Fielder stock jumped to a 2 ½-month high after the world’s biggest palm oil processor,
Wilmar International, teamed up with Hong Kong-listed investor First Pacific Co to make an A$1.27 billion offer for the
Australasian food ingredients maker.
Goodman’s dual-listed shares rose 23 percent to 71 cents on the NZX, the highest since Feb. 12, after Wilmar and First
Pacific made a non-binding, conditional offer to buy the company via a scheme of arrangement. The Asian companies are
offering 65 Australian cents a share, an 18 percent premium to last week’s closing price on the ASX of 55 Australian
cents, in what would be a 50/50 joint venture.
“The proposed transaction represents an opportunity for the Wilmar Group to create a leading Asia-Pacific agricultural
and consumer stables company,” Wilmar said in a statement to the Singapore Exchange.
Wilmar bought a 10 percent stake in Goodman in 2012, and registered interest in the food ingredients maker’s assets
which were up for sale at the time.
Goodman’s board said the offer “materially undervalues” the company’s assets and was opportunistic. Among the conditions
were due diligence, unanimous recommendation by the Goodman Fielder board, approval from the Wilmar and First Pacific
boards, and exclusivity in relation to the proposal.
Mark Lister, head of private wealth research at Craigs Investment Partners, said the offer indicated Wilmar sees
underlying value in the Goodman assets, and this first step might flush out more interest.
“If investors were willing to accept a takeover offer, they’d probably look for a more attractive price than that,”
Lister said. “We’ll get a better feel when the Australian market opens.”
Goodman’s dual-listed shares have shed about two-thirds of their value over the past five years. The stock is rated an
average ‘hold’ based on 11 analyst recommendations compiled by Reuters, with a median target price of 54 Australian
cents.
In February, Goodman forecast normalised annual earnings to be “broadly in line” with the previous year’s A$185.6
million as soaring milk prices and intense competition in baking goods eroded profitability.
The maker of household brands including Vogel’s bread, Meadowfresh milk and yoghurt, and Meadowlea butter and margarine
has been cost cutting, restructuring and divesting over the past three years, to focus on its core brands and reduce
debt.
“The board of Goodman Fielder remains focused on maximising shareholder value and will be constructive in relation to
proposals which are consistent with this objective,” it said.
Goodman has appointed Credit Suisse as financial adviser and Herbert Smith Freehills as legal adviser. Wilmar and First
Pacific appointed Bank of America Merill Lynch and UBS as financial advisers.
(BusinessDesk)