First Pacific nears $1.26-B buyout of Aussie food firm

MANILA, Philippines - Hong Kong-based First Pacific Co. Ltd., led by businessman Manuel V. Pangilinan, has moved a step closer to buying one of the top food companies in Australia and New Zealand following an upsized offer of $1.26 billion.

The move of First Pacific and partner Wilmar International Ltd. of Malaysia’s Kuok Group to acquire Australia’s Goodman Fielder Ltd. marks the creation of a leading agricultural and consumer staples company in Asia Pacific.

“The board of  Goodman Fielder advices that, in the absence of a superior proposal, it will unanimously recumbent that Goodman Fielder shareholders vote in favor of the revised proposal at a price of Aus$0.70 per share,” the listed food company told the Australian Stock Exchange yesterday.

“We believe this revised proposal also demonstrates the strength of our underlying business and brands but also the opportunity to leverage these assets to grow the business across the Asian region,” said Goodman Fielder chairman Steve Gregg.

Late last month, First Pacific partnered with Wilmar, Asia’s leading agribusiness group, to pay shareholders of Goodman Fielder Aus$0.65 (approximately $0.603) per share or a total of Aus$1.27 billion (around $1.17 billion). But Goodman Fielder’s board rejected the buyout, saying the proposal “materially undervalues Goodman Fielder and is opportunistic.”

First Pacific and Wilmar submitted yesterday a revised offer of Aus$0.70 (approximately $0.65) per share for a total consideration of Aus$1.36 billion (approximately $1.26 billion).

The partners said the upsized offer represents a premium of 33.3 percent over Goodman Fielder’s closing price on April 23 and a premium of 37 percent versus the weighted average share price since April 2.

Goodman Fielder’s board said it agreed to provide Wilmar and First Pacific with non-exclusive due diligence over a short and focused period of approximately four weeks.

“The proposed transaction represents an opportunity for the group to create a leading Asia-Pacific agricultural and consumer staples company,” First Pacific earlier said. 

“The company intends to fund its pro-rata proportion of the increased consideration from existing cash resources and/or by way of new and existing bank facilities,” First Pacific said.

First Pacific is into telecommunications (PLDT), infrastructure (Metro Pacific Investments Corp.), natural resources (Philex Mining Corp.) and consumer food conglomerate (Indofood Sukses Makmur Tbk and Roxas Holdings Inc.).

For its part, Goodman Fielder manufactures , markets and distributes food ingredients and consumer branded food, beverage and related products through brands Meadow Lea, Praise, White Wings, Pampas, Mighty Soft, Helga’s and Wonder White. It posted a net income of Aus$102.5 million (approximately US$95.1 million) for the fiscal year that ended in June 2013. 

To date, Wilmar owns 10.1 percent of Goodman Fielder.  

Wilmar claims to be Asia’s leading agribusiness group with significant investments in Australia that includes an oil palm cultivation and oilseed crushing, edible oils refining and specialty fats, sugar milling and refining, oleochemical, biodiesel and fertiliser manufacturing, and grain processing.