By NZPA
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Friday 13th December 2002 |
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The offmarket bid is at $A1.85/shares, the same price it bought the 14.9 percent stake at.
Burns Philp, controlled by New Zealand billionaire Graeme Hart, will fund the bid by cash, debt and option proceeds.
One analyst at a major institution said it was not possible to judge a Burns Philp bid until a formal bidder's statement had been submitted.
An analyst said the $A1.85 price, a 24 percent premium to yesterday's close, was in line with the takeover target's fundamental value.
"The transaction's probably reasonably sensible for Burns Philp," he said.
"It's certainly an area that they wanted to expand into."
He said Burns Philp had not been specifically expected to make a bid for Goodman Fielder.
However, the food ingredients company, which is 57 percent owned by Mr Hart, had been flagging its entry into the consumer foods market while Goodman Fielder had been seen as a takeover target for years, as its shares continued to fall.
"Put two and two together... and arguably it was speculated," he said.
Burns Philp said it will issue a more detailed announcement on its bid shortly.
Earlier today, Goodman Fielder, which has brands like Meadow Lea and Uncle Toby's, said it had been advised this morning by Burns Philp of the impending, "unsolicited" bid.
Burns Philp also said it was considering acquiring New Zealand Dairy Foods Ltd (NZDF), as part of its push to enter the consumer branded foods business.
Mr Hart's private investment vehicle, Rank Group, bought NZDF earlier this year for around $245 million.
"The Goodman Fielder businesses are attractive to us and we have reflected that in our offer price, which represents a significant premium," Burns Philp managing director and chief executive Tom Degnan said.
The offer represents a 24 percent premium to Goodman Fielder's last traded price of $A1.49.
"The proposed acquisition of Goodman Fielder by Burns Philp represents a continuation of Burns Philp's strategy to develop its business both organically and by acquisition, with its focus continuing on its mix of ingredients businesses and consumer branded foods businesses," Burns Philp said.
Burns Philp said about half of its earnings before interest and tax came from its consumer branded foods businesses and half from its ingredients businesses.
That was after it sold off two divisions, terminals and vinegar, and acquired the Fleischmann's ingredients and consumer branded products business in South America earlier this year.
With regard to funding, Burns Philp said it currently held about $A770 million in cash on deposit, which was available to fund the acquisition.
The $A1.85 per share offer gives Goodman Fielder a $A2.2 billion market value, meaning Burns Philp would fund about $A1.4 billion of the acquisition without cash.
"A number of financiers, led by Credit Suisse First Boston, have provided the Burns Philp group with underwritten commitments for the provision of new debt facilities for an amount sufficient to meet the consideration under the bid," Burns Philp said.
Those commitments also covered "costs associated with the bid, and the refinancing of certain existing funding facilities of Burns Philp and Goodman Fielder as required".
Burns Philp said entities associated with major shareholder Graeme Hart, its deputy chairman, had exercised options raising an additional $A50 million of equity and cash reserves.
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