By Maggie Lu Yueyang
SYDNEY (Reuters) - Australia's Murray Goulburn Co-operative Co Ltd agreed to sell its 17.7 percent stake in Warrnambool Cheese and Butter Factory Co Holdings Ltd (ASX:WCB.AX - News) to rival bidder Saputo Inc (Toronto:SAP.TO - News), finally bowing out of the hotly contested bidding battle.
Murray Goulburn's capitulation cleared another hurdle for Saputo to take over Warrnambool, which is seen as a platform for the Canadian dairy maker to tap growing demand in Asia for both traditional dairy products and high-tech milk extracts.
Eyes are now on Japanese beverage giant Kirin Holdings Co Ltd (:2503.T), which holds a 10 percent stake in Warrnambool through its local unit Lion and has an important cheese making and packaging partnership.
A Lion spokesman said the company has no plan to accept Saputo's offer, posing as the last hurdle for the Canadian company to take full control of Warrnambool.
"Lion has no current intention to accept Saputo's takeover offer in relation to WCB," a Lion spokesman told Reuters. "Lion looks forward to continuing to strengthen its relationship with WCB," he said.
Saputo had already won majority control in Warrnambool after former rival bidder Bega Cheese Ltd (ASX:BGA.AX - News) gave it a leg-up last week by selling its 18.8 percent stake to the Canadian company.
Murray Goulburn's sale will lift Saputo's stake in Australia's oldest dairy firm to 75.4 percent, triggering a 20 cent rise in its offer price to A$9.40 per share or A$526 million ($465.96 million).
If Saputo reaches 90 percent acceptances, the offer will rise again to A$9.60 per share, or A$537 million. The Saputo offer has been extended to February 4 after reaching the control threshold.
Murray Goulburn, which offered A$9.50 per share, or A$532 million, for Warrnambool said it intended to seek regulatory consent to withdraw its bid and then accept Saputo's offer.
The Murray Goulburn offer was conditional on acceptances of 50 percent and on regulatory approval that is not due until next month.
"In light of Saputo acquiring a controlling interest in (Warrnambool) we have an obligation to our co-operative shareholders to maximize the financial outcome," Murray Goulburn managing director Gary Helou said in a statement.
The company will receive cash proceeds of at least A$92.9 million from the sale and a gain on its investment of A$51 million before tax and costs.
($1 = 1.1289 Australian dollars)
(Additional reporting by Ritsuko Shimizu in TOKYO; Editing by Lincoln Feast and Matt Driskill)