Beston Global Foods flags approach for dairy business

Beston Foods has been in the headlines for the past year as it tackles changing conditions. Now there’s a new twist in the tale.

A major international dairy company has indicated interest in buying Beston Global Food’s dairy operations, the South Australian business has confirmed.

However, the identity of the corporate suitor and price tag on offer remains undisclosed.

In a statement to the Australian Securities Exchange today, Beston management said the company had “received several non-binding indicative offers in recent months.”

The offers relate to debt refinancing and “equity solutions” for Beston’s core business of dairy and dairy nutrition.

“Discussions and due diligence have now progressed with a major international dairy company which has a specialisation in dairy nutraceuticals and functional ingredients, and is a globally recognised leader in this field,” the Beston statement confirmed.

Beston management has been advised a binding proposal will be received on or before September 9.

“The discussions in relation to this proposal are ongoing subject to nondisclosure agreements,” management said.

In July, Beston sold its meat division to pay down debt, while also indicating changes to its dairy business.

Beston’s former meat division — Provincial Food Group — was sold to a Victorian-based consortium for $4 million, with the money to be paid to its major creditor NAB, which was owed $55m as at the end of March.

Shares in the South Australian dairy company have been suspended since the start of the financial year, with the company trying to find a solution to its debt pressures.

Earlier this year, Beston chief executive Fabrizio Jorge said a flood of cheap dairy imports and an unexpected surge in milk production had left the company with “north of $20 million in stock” in February.

Mr Jorge said Beston had struggled to compete on the domestic market with a flood of cheap US and New Zealand cheese and butter imports.