Takeover “not imminent” as A2 milk rejects Freedom Food-led offer

The a2 Milk Company has rejected a takeover offer made by major shareholder Freedom Foods Group and Dean Foods Company of the US and said it had received other confidential enquiries indicating potential interest in a2 Milk and is evaluating these.

The dairy company also announced in a trading update that FY2015 group sales are 39% up over 2014 to NZ$ 154 million (A$137m).

“The Board does not consider that the proposal in the expression of interest (EOI) is compelling, and accordingly the Board would not be in a position to recommend it to shareholders,” the a2 Milk Company said.

“The Board has advised Freedom/Dean Foods that it is willing to have a discussion in relation to the EOI subject to agreement on appropriate confidentiality and related undertakings customary in situations of this nature.”

The a2 Milk Company Board said that it remains of the view that there is no certainty that any proposal will result in a transaction or offer capable of acceptance by the Company or its shareholders, and that a takeover offer is not imminent.

On 22 June, the a2 Milk Company received the expression of interest from two associated trade parties that included Freedom Foods. The Perich family controlled Freedom Foods is the single biggest shareholder in A2 with 19.14% and increased its stake in June.

And in a trading update, a2 Milk said that the Australian and New Zealand business is performing strongly and continues to provide a platform for the Company’s international growth initiatives.

Strong growth is expected to continue in FY16 with budgeted group revenue of NZ$267 million (73% increase over prior corresponding period (PCP) and group operating EBITDA (earnings) of NZ$12 million (200% increase over PCP), the a2 Milk Company said.

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