Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search


UPDATE:A2 confirms Dean Foods is other party in possible bid

UPDATE: A2 confirms Dean Foods is other party in possible takeover bid with Freedom Foods

(Adds A2 confirmation of Dean Foods as prospective buyer)

By Paul McBeth

June 24 (BusinessDesk) - A2 Milk Co has confirmed media speculation that Texas-based food and beverage company Dean Foods is the other party with Freedom Foods that is contemplating making a takeover offer for the milk marketing business.

Dual-listed A2 said it made the disclosure at the request of the ASX in response to media reports. The Australian Financial Review's Street Talk column yesterday named Dean Foods as the second party in a consortium seeking to buy A2, providing an alternative route for the company, which markets milk with a variant protein, to expand in the US. The AFR speculated the bid could be as much as $2 a share, a massive premium to A2's share price of 57 cents before potential takeover became public.

"ASX has requested in response to media speculation that a2MC confirms the identity of the parties who submitted the expression of interest," the company said. "The parties are Freedom Foods Limited and Dean Foods Company. The board is continuing to seek further information in order to evaluate the proposal and will update the market on further developments as appropriate."

A2 shares climbed 8.5 percent to a 12-month high of 77 cents today.

Freedom Food shares, which are majority owned by the Perich Group, have gained 7.1 percent since the A2 announcement, and traded unchanged on the ASX today at A$3.

A deal would be contingent on the consortium undertaking due diligence. It also has a restriction on A2 changing the number of shares on issue, effectively scotching a planned equity raising that has been in the pipeline.

Freedom Foods is represented on A2's board by Mervyn Miles. Managing director Geoff Babidge, general manager international development Simon Hennessy, and chief executive Australia and New Zealand Peter Nathan are also alumni of the ASX-listed firm.

When A2 listed on the ASX earlier this year it didn’t include a capital-raising despite a three-year US$20 million launch into the US market with fresh milk.

The company markets its products as potentially beneficial for people who suffer intolerance to the naturally occurring A1 protein in milk, including bloating and stomach pain. A2 has captured some 9.3 percent of the Australian fresh milk market by selling milk that only has A2 protein.


© Scoop Media

Business Headlines | Sci-Tech Headlines


$7.5 Billion Surplus: Government Accounts "Show Strong Economy"

“The surplus and low levels of debt show the economy is in good shape. This allows the Government to spend more on infrastructure and make record investments in health and education,” Grant Robertson says. More>>


New OIO Application Trumps Judicial Review: OceanaGold Cleared To Buy Land For Waihi Tailings Expansion

In a surprise turnaround, the government has given OceanaGold a greenlight to buy land to expand its Waihi mine after the application was previously turned down by Land Information Minister Eugenie Sage. More>>


Christchurch Rebuild: Fletcher Sued For $7.5m Over Justice Precinct

Fletcher Building is being sued for $7.5 million by utilities contractor Electrix, one of the subcontractors on the Christchurch Justice and Emergency Services Precinct. More>>

Three New Drugs: PHARMAC Signs Bundle Deal For More Cancer Medicines

420 New Zealanders with lung cancer, breast cancer, multiple sclerosis and respiratory disease will benefit each year from a bundle deal PHARMAC has finalised with a medicine supplier. More>>


"Levels Playing Field": Government Responds To Electricity Price Review

The changes announced today include: • Supporting new and independent retailers by requiring the big power companies to sell into the wholesale market at affordable rates. • Extending discount rates to all customers • A pilot scheme to help customers who have not switched power providers before to shop around for better deals... More>>