Offer price for food giant sliced

TIM HUNTER
Last updated 12:08 02/07/2014

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The takeover price for bread and milk giant Goodman Fielder has fallen by about A$50 million (about $54 million) after a four-week due diligence period by the bidders.

Singaporean palm oil trader Wilmar International and Bermudan investment company First Pacific offered to buy Goodman Fielder for A70c a share in May.

The Goodman board agreed to recommend the proposal on May 16, but said today that the price had been reset to A67.5c a share, valuing the trans-Tasman group at A$1.32 billion.

Chairman Steve Gregg said the deal was attractive for shareholders.

"I believe it also represents a positive outcome for our employees, our customers and our consumers," he said.

"It provides an opportunity to further leverage our strong consumer food brands in Australia and New Zealand to grow our business across the Asian region."

Wilmar and Hong Kong-listed First Pacific already own or control 19.9 per cent of Goodman Fielder.

Their takeover of the remaining 80.1 per cent is to be achieved through a scheme of arrangement requiring a 75 per cent vote of approval from shareholders.

The vote is expected to be held in November.

Alongside the takeover announcement, Goodman Fielder said it would write down the value of its Australian and New Zealand baking business by A$300m to A$400m in its result for the year to June.

As previously flagged, Goodman Fielder will pay a A1c a share final dividend for the 2014 financial year.

Goodman Fielder has substantial New Zealand assets, supplying staples such as milk, cheese and bread to the grocery trade.

Its New Zealand brands include Nature's Fresh, MacKenzie, Meadow Fresh, Tararua and Puhoi Valley.

Before the agreed takeover, Goodman Fielder had indicated there was interest from unnamed parties in buying the New Zealand dairy business, but Wilmar and First Pacific spokesman Ross Thornton said in May that their intention was to keep the asset base together.

"This certainly kills off the sale of the New Zealand dairy business," he said.

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