Saputo hits back with $430 mln bid for Australia's Warrnambool

Reuters

* Saputo raises bid by 14 pct to A$8/share

* Trumps bids by WCB shareholders Bega, Murray Goulburn

* WCB directors recommend new Saputo bid

* WCB shares already above latest offer price

SYDNEY, Oct 25 (Reuters) - Saputo Inc, Canada'slargest dairy producer, looked likely to triumph in the battlefor Australia's Warrnambool Cheese and Butter Factory CompanyHoldings Ltd (WCB) after hiking its bid by 14 percentto A$449 million ($430 million).

Saputo's A$8 per share offer trumps separate approaches fromWCB's two largest shareholders, Australian-based Bega Cheese Ltd and Murray Goulburn Co-operative Co Ltd, and won arecommendation from WCB's directors.

"It's very close to what must be the final bid," said MarkTopy, senior industrials analyst at Canaccord Genuity, whoexpects Bega and Murray Goulburn to bow out of the battle.

"Price is almost immaterial for (Saputo) and they've got themost firepower."

Australian dairy and farm assets are attracting increasedinterest as companies ramp up their exposure to Asia's growingappetite for milk, cheese and other food products.

WCB shares, already trading above the new offer price, wereon a delayed start on Friday, having closed at A$8.15 onThursday.

After a series of takeovers in the Australian agribusinessector, Bega and Murray Goulburn have promoted their offers askeeping assets in Australian hands.

Saputo has highlighted its global ambitions and its abilityto encourage competition for farmer milk supplies.

"We know how important competition is for milk producers.Saputo does not currently have a business in Australia, soSaputo's arrival in Australia will not reduce competition,"Instead, we will ensure WCB is well-financed and remains avibrant competitor," Saputo Chief Executive Lino A. Saputo, Jrsaid in a statement.

Saputo will have to win approval from the Foreign InvestmentReview Board.

In terms of competition regulators beyond Australia, Topysaid the combined businesses would still be a small playercompared to New Zealand's Fonterra.

"In fact, it will increase competition because Fonterra'sbeen so dominant in a lot of export markets," he said.

Saputo's bid tops the A$7.50 per share approach from MurrayGoulburn, which owns about 17 percent of WCB, and a A$5.78 pershare offer from top shareholder Bega a month ago that kickedoff the takeover battle. The stock traded at A$4.51 before theinitial Bega approach.

The offer allows WCB to pay fully franked dividends worth upto a further 56 cents per share of value.

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