Heinz to buy Golden Circle for $288 million, sharemarket plummets again: Economy roundup

Global food and beverage giant HJ Heinz has acquired Australian fruit juice and jam icon Golden Circle for $288 million.

Global food and beverage giant HJ Heinz has acquired Australian fruit juice and jam icon Golden Circle for $288 million.

Golden Circle, which is based in Brisbane, floated on the Newcastle-based National Stock Exchange in March, but chief executive Philip Cave said Heinz’s offer was just too good to refuse – the $1.65-a-share offer represents a four-fold increase on the Golden Circle share price on 3 October of 40c.

Importantly, Heinz, the company behind iconic brands such as Heinz Spaghetti and Baked Beans, has vowed to maintain the company’s relationships with growers, many of whom are shareholders in Golden Circle.

The support of growers will be crucial when shareholders meet to consider the deal in mid December. To pass, the offer will need to be approved by more than 50% of Golden Circle shareholders and at least 75% of the total number of votes cast at the takeover meeting.

In other big corporate news, Suncorp shares have surged 6% after the bank told investors it has considerable interest from potential buyers of its banking division. Suncorp has refused to divulge any names although most of Australia’s big banks will run the rule over the business.

Suncorp’s surge has done little to help the Australian sharemarket though, with nervous investors fleeing for the exits again this morning.

The benchmark S&P/ASX200 index has fallen 3% this morning to be down 140.1 points at 4555.3 points at 12:05pm AEST.

Once again, financial stocks, mining companies and any businesses remotely connected to the US economy have been sold off. Rupert Murdoch’s News Corporation is one of the morning’s biggest losers, down 4.3%.

The mood was set on Friday night, when data from the US revealed its economy lost a whopping 159,000 jobs in September, taking the total number of jobs lost since November 2007 to around one million.

Wall Street fell 1.5% on Friday night, despite the fact Congress finally passed the US Government’s $US700 million bailout package.