Australian dairy company Warrnambool Cheese and Butter Factory (WCB) on Friday (19th February) rejected a second bid from rival firm Murray Goulburn.

The WCB Board unanimously rejected the revised bid of $4.35 cash per share, which was higher than Murray Gouburn’s earlier bid, which was said to be ‘at or below’ $4 per share.

WCB’s stock closed at $4 on the Australian Stock Exchange on Friday, however the WCB Board maintained that Murray Goulburn’s latest offer did “not incorporate appropriate value for WCB’s medium and long term prospects, current and future initiatives, unique geographic location and strategic position in the Australian dairy industry”.

They stated further that the proposal did “not reflect a fair share for WCB shareholders of the significant synergies that could be unlocked from a combination of WCB and MG”.

Stephen O’Rourke, managing director of Murray Goulburn, said he was “extremely disappointed” with this latest rejection by WCB.  He said “The Warrnambool response does not change our belief in the strategic and financial merits of our proposal. We believe both WCB shareholders and suppliers should be provided with the opportunity to realise the value inherent in our proposal.”

WCB’s Managing Director, John McLean believes that WCB can offer superior value to shareholders by operating as an independent company and focusing on their “strategy of growing milk supply, operating excellence and diversification into higher value added products” rather than accepting this proposal from Murray Goulburn.

WCB’s latest half year results delivered significantly improved financial performance from that of FY2009, with net profit after tax of $8.9 million – an increase of over 500%.

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