SMC rival for Australia’s National Foods asked to disclose details of bid offer

San Miguel Corp. (SMC) gained headway in its takeover fight for Australian dairy giant National Foods Ltd. after the the Takeover Panel ordered SMC’s rival bidder Fontera Cooperative Ltd. to disclose more details on its planned acquisition.

The order was in response to SMC’s complaint lodged with Australia’s Takeover Panel in January, alleging that there has been inadequate disclosure concerning a possible joint venture between Fonterra and French groups Sodima SAS and Yoplait SAS.

As part of its latest offer, Fonterra said it may form a venture in Australia and New Zealand with Sodima as part of an agreement to maintain licensing rights to the Yoplait yoghurt brand if it becomes successful in acquiring up to 100 percent of National Foods.

National Foods distributes the Yoplait brand in Australia while Sodima is a Yoplait-controlled entity which is a counterparty to manufacturing and distribution agreements with National Foods.

In a ruling issued recently, the Takeovers Panel, which has powers to ask bidders or targets to release extra information or alter takeover documents, said Fonterra should provide more information on the venture to ensure transparency.

Fonterra, which holds about 19 percent of National Foods, agreed to disclose more details and said the ruling would not affect its current bid for National Foods.

SMC filed its complaint after Fonterra increased its bid for National Foods by 10 cents each from A$5.45 a share, topping the offer of SMC, Southeast Asia’s largest food and beverage conglemerate.

Fonterra’s new offer values National Foods at up to A$1.9 billion and would rise to A$6.20 if it acquires more than 90 percent of the Australian dairy company.

SMC’s offer currently stands at $A5.90 after National Foods declared a 10 percent interim dividend late last month.

Fonterra, which holds 19.02 percent of National Foods, is the world’s largest dairy products exporter. It is owned by about 12,000 farmer suppliers, most of which are members of the Dairy Farmers of New Zealand.

The management of National Foods had previously recommended to its shareholders to accept SMC’s offer in the absence of a proposal.

SMC already owns a number of assets in Australia, including the Berri fruit juice operations and brewer James Boag and Son.

SMC said National Foods fitted the group’s strategy of expanding its presence in the beverage and food businesses in the Asia-Pacific region.

The acquisition, according to SMC, would provide access to dairy raw material and make available a wide range of products to its customers with the focus on the branded segment. National Foods would also get access to the Asian dairy market through SMC.

National Foods is one of Australia’s largest food companies, listed on the Australian Stock Exchange with leading brands such as Pura milk, Yoplait yoghurt and King Island gourmet cheese and cream.

SMC’s takeover bid represents the latest move in the conglomerate’s long-term strategy of increasing its non-alcoholic beverage and food holdings.

SMC dominates its home market in beer, liquor, soft drinks, food and poultry products. It is also into packaging and agribusiness.

Founded in 1890, SMC has over 100 facilities in the Philippines, Vietnam, Thailand, Indonesia, Hong Kong, South China and Australia. The company employs over 26,000 people in the region.