Bega sells WCB stake to Saputo; “Internal issues” key to lower than expected Super Retail Group sales: Midday Roundup

The Warrnambool Cheese and Butter Factory has welcomed the move by Bega Cheese to sell its 18.8% stake to Canadian dairy giant Saputo.

Bega’s decision takes Saputo one step closer to acquiring 100% of WCB and speculations have started to mount that Murray Goulburn will drop out of the takeover battle and sell its stake to Saputo.

Saputo’s share in WCB has now increased to 46.17%.

Bega executive chairman Barry Irvin said in a statement the company’s investment in WCB had been a “resounding success”.

“Bega Cheese’s initial investment in WCB and subsequent takeover offer for the company has created significant value for both companies’ shareholders. Bega Cheese’s takeover offer was the catalyst for a process which has highlighted the value of the Australian dairy industry, a rerating of Bega Cheese’s share price and a substantial profit for Bega Cheese,” Irvin said.

WCB chief executive David Lord said this morning once Saputo reaches a 50% plus stake of the company it would signal “the beginning of the end” of the process, according to the ABC.

“With the 22nd of January, which is the closing date of the Saputo offer, looming, we’d be disappointed if all WCB shareholders didn’t participate in the offer and won’t enjoy what is a really significant price premium over the WCB share price, as it was at the beginning of this process,” he said.

“Internal issues” key to lower than expected Super Retail Group sales

Super Retail Group announced lower than expected sales results for the first six months of the financial year.

While its group sales results for the period were $1.096 billion, up 6% on the previous comparative period, this was lower than anticipated, chief executive Peter Birtles said.

He said it reflected a number of short term internal challenges across its three divisions, auto, leisure and sports. These included the implementation of new IT systems which he said had some hitches.

Birtles said the group expected to report a net profit after tax of between $61 million to $62 million for the same corresponding period. This is an increase of between 0.7% and 2.3% compared to the same time in the previous year.

Upon the announcement the group’s shares dropped approximately 20%.

The group operates brands including Rebel, Supercheap Auto and Ray’s Outdoors, and it recently acquired the Workout World chain.

Shares down on open

Aussie shares have fallen slightly on open, following losses on Wall Street’s overnight.

The S&P/ASX200 was down 10.1 points to 5299 at 11:50am AEDT. Overnight the Dow Jones closed 64.93 points lower, down 0.39% to 16,417.01.