Hart extends offer to allow more scrutiny

By PHILIPPA STEVENSON

Burns Philp has cleared two regulatory hurdles in its hostile bid for Goodman Fielder and has extended its $2.4 billion offer by two weeks to allow more time for consideration of a third.

The Sydney-based yeast and spice company controlled by New Zealand billionaire Graeme Hart said yesterday that the Australian Competition and Consumer Commission had approved its takeover bid for Goodman, Australia's biggest food company.

The bid had also cleared America's anti-trust regulations. Burns Philp said it would extend its offer from February 18 to March 5 to give the New Zealand Commerce Commission time to consider it.

The Burns Philp subsidiary New Zealand Food Industries makes bakery ingredient products such as bread improvers, muffin and other pre-mixes for which it has an estimated 8 per cent market share.

NZFI also owns New Zealand's only fresh yeast manufacturing plant, in Auckland, which supplies all the fresh yeast used by the local baking industry.

The major Burns Philp shareholder, Hart's Rank Group, wholly owns New Zealand Dairy Foods, which manufactures or supplies dairy products for export and domestic markets, including Anchor and other brands of milk, cream, cheese and yoghurt. It distributes butter from Fonterra under a long-term supply contract, and olive oil-based margarine.

Goodman Fielder has many well-known brands, including in baking, Quality Bakers, Vogels, Freyas and Ernest Adams; in edible oils, Meadow Lea, Sunrise, Olivani and Gold N Canola; and in cereals and snacks, Uncle Tobys, White Wings and Bluebird.

The company also manufactures and distributes margarine and olive oil-based spreads in New Zealand.

On Monday Burns Philp launched an offering of US$150 million of senior subordinated notes to help fund the takeover. Goodman directors have recommended rejection of the A$1.85 ($2) a share bid but the Australian Takeovers Panel is now considering a number of complaints from Burns Philp about the target's statement, including that Goodman did not supply sufficient information.

Goodman says it is talking about options with "a number of parties".