29 Apr 2014

Goodman Fielder offer 'opportunistic'

9:44 am on 29 April 2014

An analyst says Goodman Fielder shareholders will laugh off a takeover offer from the company's third biggest shareholder valuing it at $A1.27 billion.

Goodman Fielder has labelled the takeover bid from Wilmar International as opportunistic and says it materially undervalues the company.

Singapore-based agribusiness Wilmar, which holds 10.1%, is offering A65 cents per share for Goodman, in partnership with Hong-Kong listed investment business First Pacific Company.

Wilmar wants to use a scheme of arrangement, which means it needs approval from shareholders who own at least 75 percent of the company, and they must number at least half the shareholders.

That's an easier way to acquire a listed company than a normal takeover which needs 90 percent of shareholders to accept.

Goodman, whose brands include Meadowlea, Praise, Vogels and Edmonds, says it wants to maximise shareholder value and would consider a more realistic offer.

Sydney-based research analyst at Fat Prophets, Brian Han, agrees that the offer is very opportunistic.

He said the company is underperforming in relation to its true underlying earnings power and a fair value would be at least A80 cents and closer to $A1.

"I'm pretty sure Wilmar and its partner know that that first offer is probably nowhere near the offer that's going to get them there."

Wilmar and First Pacific said they had noted Goodman Fielder's response and will continue to engage with the food giant's board.

Shares in Goodman Fielder rose 23 percent to 71 cents on the NZX, the highest since February.