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Goodman Fielder rejects takeover

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The company that owns food brands including Helga’s and MeadowLea has received a $1.27 billion takeover offer from an Asian agribusiness and a Hong Kong investment firm.

But Goodman Fielder, which also owns the Vogel’s, Meadow Fresh and Olive Grove brands, says the offer is too low.

Singapore’s Wilmar International, which already owns a 10 per cent stake in Goodman Fielder, and First Pacific Company, have jointly offered 65 cents for every Goodman Fielder share.

The shares last traded on the Australian share market at 55 cents each, and have fallen from 77 cents a year ago.

“The board believes that the current proposal materially undervalues Goodman Fielder and is opportunistic,” Goodman Fielder said.

“The board has advised Wilmar and First Pacific accordingly.”

But the company said it would continue to assess other opportunities to maximise shareholder value and it has appointed financial and legal advisers.

Wilmar International already owns Australian assets, after buying CSR’s sugar business, now known as Sucrogen, in 2010.

Goodman Fielder recently announced it was bringing forward its plans for 300 job cuts in response to a weaker than expected financial performance.

It expects its annual normalised earnings to be down by 10 to 15 per cent on the market’s forecast of $180 million, due to a combination of factors.

Selling prices in the group’s baking business have been lower than expected, and about $10 million to $15 million in manufacturing and supply chain cost savings have been delayed.

Earnings in its grocery division are also lower than expected, due to increased competition, and the group’s New Zealand dairy business has been paying higher farmgate milk prices.

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