Reuters Australia
Australian co-op makes solo bid for Dairy Farmers
Monday August 11, 02:14 PM
(Adds details)
MELBOURNE, Aug 11 (Reuters) - Australian farming cooperative Murray Goulburn has made a solo bid for dairy producer Dairy Farmers after its consortium with Italy's Parmalat PLT.MI fell apart last week, a source familiar with the situation said on Monday.
The bid would bring the number of potential bidders for Dairy Farmers to three, restoring competitive tension to a sale that is expected to fetch A$800 million-A$1 billion ($700-$885 million).
National Foods, an Australian food producer owned by Japan's Kirin Holdings 2503.T, is the only confirmed bidder for Dairy Farmers. Media reports have said Canadian dairy products company Saputo SAP.TO has also bid.
Murray Goulburn is the largest processor of milk in Australia, processing around 35 percent. Dairy Farmers, which is owned by 2,000 farmers, makes Dairy Farmers brand milk, Coon cheese and Ski yoghurt.
Dairy Farmers declined to comment, while Murray Goulburn was not immediately available for comment.
The source, requesting anonymity because of confidentiality agreements, said Murray Goulburn lodged a final bid over the weekend.
The competition regulator had raised concerns over the joint bid from Parmalat and Murray Goulburn.
Murray Goulburn would still require competition clearance, but concerns the Australian Competition and Consumer Commission raised over the joint bid are less likely to still be a problem because there is less of an overlap in their operations.
Australian producers are benefiting from high milk prices and tight supplies, and Dairy Farmers recently posted a 23 percent increase in earnings for fiscal 2008.
But producers also face increased costs for water, and the strong Aussie dollar has made exports more expensive and less competitive against New Zealand dairy products.
Two other international dairy firms -- Singapore's Olam OLAM.SI and New Zealand cooperative Fonterra -- have pulled out of the bidding for Dairy Farmers. ($1=A$1.13) (Reporting by Victoria Thieberger)
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