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Goodman board rejects Burns offer
By Alex Frew McMillan
MELBOURNE, Australia (CNN) -- The board of food group Goodman Fielder on Friday advised the company's shareholders to reject the takeover offer from Burns Philp. " The offer price does not reflect an appropriate acquisition price for control of Goodman Fielder," Chairman Keith Barton said in a statement to the Australian Stock Exchange. "The bid is opportunistically timed given the impact of short term commodity price increases, primarily caused by drought conditions." Goodman management said the new strategy it began charting in the middle of 2001 is now paying off and expected to provide more value to shareholders. Its current performance indicates that profitability is continuing to improve, the directors stated. Barton called the Burns Philp offer "inadequate and opportunistic," with only a 10 to 15 percent premium on the company's stock price through August. Goodman evaluating strategiesBurns Philp launched an unexpected hostile bid for larger Goodman Fielder in the middle of December. Its bid of A$1.85 a share was actually a 24 percent premium over Goodman's closing price at that time. But Goodman, which makes butter and bread products under brands such as Uncle Toby's, Meadow Lea and Bluebird, had recently warned on profits and feels its business is coming back. Goodman Fielder's management is evaluating its strategies for the company and is in talks with "other parties" that could lead to alternative proposals, the directors stated. The company had already protested that many of Burns Philps' conditions ran against Australian merger rules. But Australian regulators gave the bid the go-ahead this month. Burns Philp, headed by New Zealand's richest man, Graeme Hart, is expected to proceed with its offer, which would turn it into a worldwide food-industry player with A$4.5 billion in assets. Goodman shares riseAnalysts suggested that Goodman's resistance may be designed to solicit a higher price from Burns Philp. Burns Philp said this week that it has raised A$1.52 billion in funding to back its bid. The company may even lower its offer after Goodman stated it may have tax liabilities of as much as A$101.6 million, though that was mitigated by an improved profit forecast for 2003. Goodman shares closed up 1.14 percent to A$1.78 on Friday, while Burns Philp was steady at A$0.51. Both outperformed the broader S&P/ASX 200 benchmark, which fell 0.15 percent.
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