Bega Cheese was yet to announce details of the equity raising for its anticipated $550m-plus acquisition of the Lion Dairy and Drinks business on Tuesday night, but already some are wondering whether asset sales from the Lion portfolio could be on the cards.
The understanding is that Bega, which is advised by Kidder Williams, is raising about $400m at about $4.50 per share to fund the purchase, which is about half of its own $1bn market value, so it is a big bite for the listed food group.
Some believe that the company may see Lion’s juices business as non-core further down the track and opt for a divestment, retaining the fresh milk and dairy operations.
The $550m-odd price tag is a far cry from what Japan’s Kirin Holdings outlaid for the assets — first paying $2.9bn for the dairy and fruit producer National Foods in 2007, then $950m for Dairy Farmers the following year.
Depending who you speak to, Bega appears to be snaring a bargain and it make sense to offload the juices division for a nominal sum.
The company has already bought up brands such as Vegemite and Kraft peanut butter and hopes for its portfolio to comprise 70 per cent branded products in two years.
Coal price not right as Kestrel mine owners seek $4.8bn pay dirt
The owners of the Kestrel coal mine will have to convince buyers to pay about $4.8bn for the mine, but the coal price has fallen about 20 per cent since it was first set to hit the market.
St John of God in discussions over Healthscope leases
The not-for-profit St John of God Health Care has discussed with Healthco Healthcare and Wellness REIT taking over some real estate leases from tenant Healthscope.