Sector News

Freedom Foods and US partner Dean Foods scrap a2 Milk takeover bid

September 2, 2015
Food & Drink

US dairy giant Dean Foods has abandoned a potential takeover of trans-Tasman dairy company a2 Milk.

Dean lobbed an expression of interest into a2 with Australian breakfast cereal and snack company Freedom Foods in June. Freedom confirmed on Monday that the pair had ditched takeover plans.

“The company and Dean Foods have ceased detailed discussions in relation to a2,” Freedom said.

Fairfax Media revealed earlier in August that insider trading investigation into Dean by the US regulator had derailed the takeover plans. The investigation reportedly involved golfer Phil Mickelson and professional sports gambler William T. Walters.

Dean has also refused to explain the resignation of its chairman Tom C. Davis, who left soon after the company revealed it was being investigated.

A2 Milk’s board rejected the offer from Dean and Freedom, which is controlled by the billionaire Perich family and is a2’s biggest shareholder, saying it was not compelling enough.

The three parties had not spoken in the month since, and Freedom was believed to be underwhelmed by a2’s full-year financial results, despite it reporting a 40 per cent surge in revenue and being broadly in line with analysts’ estimates.

Freedom posted on Monday a 366.8 per cent jump in net profit to $56.6 million for the year ending June 30.

Chief executive Rory Macleod said this included “an unrealised post-tax fair-value gain of $51.96 million” after the company signalled earlier that it wanted to sell its 19 per cent stake in a2 Milk.

On an underlying basis, Freedom’s net profit fell 60.3 per cent to $4.9 million. Revenue, meanwhile, firmed 4.1 per cent to $91.5 million.

Mr Macleod said Freedom had merely reclassified its a2 stake for accounting reasons, after it lost one of its two board seats following the resignation of Perry Gunner at the milk processor’s annual meeting in November 2014. He said it did not mean Freedom would literally sell its holding.

“The strategic investment in the a2 Milk Company provides the company [Freedom Foods] and its shareholders a potentially significant value-creation opportunity,” he said.

“We will continue to review all our options with regard to the a2 investment, including evaluating the benefits of maintaining a strategic stake in a2.”

Source: Sydney Morning Herald

comments closed

Related News

October 10, 2021

Tetra Pak and Poka combat food production waste with digital tools and training

Food & Drink

Tetra Pak is embarking on a new strategic collaboration with connected factory worker platform Poka to accelerate zero waste processes in food manufacturing plants. By reducing downtimes, Tetra Pak aims to contribute to the UN Sustainable Development Goal 12: Responsible consumption and production.

October 10, 2021

Ripe for change? Spanish Royal Decree targets plastic fruit & veg ban as industry decries food waste risks

Food & Drink

Stipulated in a Royal Decree on packaging and waste, the measures will also seek to restrict the use of plastic bottles for water, according to sources revealed by national news organization El País. If ratified, the rulings will impact small retailers and supermarkets alike.

October 10, 2021

Asahi names PepsiCo’s Danny Celoni as next Carlton & United Breweries CEO

Food & Drink

Celoni will join Asahi Beverages from PepsiCo, where he is CEO of the company’s Australia, New Zealand and South Pacific business. He will assume the CUB chief executive role in February, succeeding Peter Filipovic.

Send this to a friend