Wilmar International

[specuvestor]

Point is: they are the biggest miller which will be having structural excess capacity as others do inhouse. I'm not sure if they need to buy more CPO if others are also refining themselves to reduce their tax.

[BlueKelah]

Kuok Khoon Ean son of robert just picked up some shares in the company via open market on 15 JAN. Sign of things to come?

[freedom]

A good set of result.

plantation contributed less and less profit and palm and laurics contributed better profit. This should be the way to do business.

Turn around of oilseed and grains, there is a great future for oilseed and grains and good profit from consumer product.

Next stop, to turn around sugar operation. So far the acquisition of Sucrogen has not contributed meaningfully to the profit.

[Clement]

A good set of result.

plantation contributed less and less profit and palm and laurics contributed better profit. This should be the way to do business.

Turn around of oilseed and grains, there is a great future for oilseed and grains and good profit from consumer product.

Next stop, to turn around sugar operation. So far the acquisition of Sucrogen has not contributed meaningfully to the profit.

Agreed.

To add, with lower planned capex for FY 2014, free cash flow should improve going forward.

[valuebuddies]

Wilmar To Acquire in Shree Renuka Sugars Limited

Wilmar is trying to reduce its reliance on palm oil, it would be interesting to see how will it reformed in 3 years down the road. Giving up 5.5c dividend is too generous even though the results is so so only in my opinion.

Vested and waiting to sell

[greengiraffe]

PUBLISHED APRIL 28, 2014
Australia's Goodman Fielders rejects takeover offer from Wilmar

[WELLINGTON] Australian food company Goodman Fielder on Monday said it had received a takeover offer proposal from Singapore's Wilmar International Limited and Hong Kong's First Pacific Company Limited, but said the offer undervalued the company.
In a statement, Goodman said the non-binding, "highly conditional" offer received over the weekend had proposed a price of A$0.65 per share. "The Board believes that the current proposal materially undervalues Goodman Fielder and is opportunistic," Goodman said in a statement.
"The board has advised Wilmar and First Pacific accordingly."
Shares in Goodman Fielder closed at A$0.55 last Thursday. They have lost over 28 per cent of their value in the past year, against a 8.4 per cent gain in the broader market.

Wilmar's latest target has recent history of disappointment and I seriously don't think Wilmar has the ability to turn it around when many angmo CEOs at GFF has problems turning it around...
This loaf of bread constantly faces pressures of all sorts

Goodman Fielder to speed cuts as trading conditions weaken
• MITCHELL NEEMS
• BUSINESS SPECTATOR
• APRIL 02, 2014 10:46AM
GOODMAN Fielder will accelerate its cost-cutting program and has lowered its full-year guidance on the back of a deterioration of market conditions since its half-year results.
The food company said the deterioration had affected third-quarter performance and as a result it now expected normalised earnings before interest and taxation (EBIT) for fiscal 2014 to be between 10 per cent and 15 per cent below the current analysts’ consensus of approximately $180 million.
Investors responded poorly to the news. At 10.35am (AEDT) Goodman Fielder shares were 18.44 per cent lower at 49.75c, against a benchmark index lift of 0.1 per cent. In earlier trade, Goodman Fielder shares hit as low as 48c, their lowest point since dropping to 47.5c on August 13, 2012.
At its interim results Goodman Fielder flagged $25m in additional cost savings that would be achieved by fiscal 2016.
However, the weakening market conditions have prompted the company to accelerate these cost saving initiatives, primarily through headcount reduction in the fourth quarter of fiscal 2014.
Goodman Fielder now expects to achieve the additional savings by fiscal 2015.
As a result of the lowered earnings guidance, Goodman Fielder expects its net debt position at June 30 will not be reduced as previously anticipated.
However, the group says its financial position remains strong and the company continues to operate comfortably within its debt covenants.
Third-quarter earnings in group’s grocery division were lower than expected due to increased competition affecting price and volume across the portfolio, with fourth-quarter earnings expected to be further hit by difficult trading conditions and lower customer inventory levels.
In its baking business, Goodman Fielder noted that an increase in volumes in the third quarter was offset by a lower-than-expected net average selling price.
Further, around $10m to $15m of a total of around $32m of cost savings set to be achieved in fiscal 2014, have been delayed until fiscal 2015.
“Continuing reliability issues across the manufacturing and supply chain network have required the company to continue to invest to maintain customer service metrics which is impacting earnings in the short term,” the group said.
Short-term earnings from Goodman Fielder’s New Zealand Dairy business are set to be affected by a further increase in the farmgate milk price.
The group said it had notified customers of price increases, but noted there was a time lag between the increase in the raw milk price and cost recovery.
Earnings expectations in the Asia Pacific business remain largely unchanged.

[greengiraffe]

Goodman Fielder says Wilmar, First Pacific bid too low at $1.8bn
JOHN DURIE THE AUSTRALIAN APRIL 28, 2014 10:39AM

Singaporeans bid big on Australian food giant 3:48

What's behind the surprising takeover bid on Australian food manufacturer Goodman Fielder?

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DIVERSIFIED food manufacturer Goodman Fielder is in play after rejecting a $1.8 billion joint bid from Singapore’sWilmar and Hong Kong-based First Pacific.

The 65-cents-a-share, all-cash proposal compares with Goodman’s closing price last week of 55 cents a share and was conditional on board approval and a scheme of arrangement. The equity value of the bid is $1.27 billion, with Goodman’s $500 million in debt taking it to almost $1.8 billion.

In a statement to the stock exchange today, Goodman said that its board considered the 18 per cent premium to undervalue the company. Goodman makes grocery products under a number of well-known brands, including MeadowLea, Mighty Soft, Pampas, Crisco, Praise and White Wings,

Goodman chief executive Chris Delaney said the bid was an opportunistic one, made in the wake of the company’s profit downgrade this month.

Wilmar owns 10.1 per cent of Goodman and is already an active player in the Australian market, owning the old CSR sugar business and Manassen Foods among other assets.

US commodities giant Archer Daniels Midland, which had its own bid for grain handler Graincorp rejected by the federal government, is a significant shareholder in Wilmar.

In a statement released today, First Pacific and Wilmar called their offer “compelling”, noting that it was at a 27 per cent premium to the volume-weighted average price of GFF stock since the April 2 downgrade.

The suitors said they would continue to seek engagement with the Goodman board, with the aim of getting access to the company’s books in order to submit a binding proposal to shareholders.

Goodman stock traded higher late last week on sharply increased volume, raising questions over possible leaks ahead of the weekend bid talks.

The stock has traded between a high of 77 cents last May to a low of 47 cents after the downgrade.

On Thursday 11.6 million shares changed hands, compared to the average volume over the last six months of 7.5 million, and the stock traded up from 52 to 57 cents before closing on its lows for the day, up 5 per cent at 55 cents a share.

Goodman has been crunched in recent years by high commodity prices and the dominance of the two Australian supermarket giants.

Under Mr Delaney, the company has fought back with cost cuts and efficiencies, particularly at its baking business, which supplies daily fresh bread to supermarkets.

Analysts are tipping earnings before interest, tax, depreciation and amortisation of around $230 million this year, down from $252 million last year.

Goodman has put its New Zealand dairy division, which earns around $55 million, on the market. Based on recent deals, that division would sell for around $550 million.

The joint offer, which was rejected after the board of Goodman Fielder met with Wilmar and First Pacific representatives over the weekend, is considered to be just the first shot.

Goodman has appointed Credit Suisse and Herbert Smith Freehills as advisors, while Merrill Lynch and UBS are advising Wilmar and First Pacific.

[greengiraffe]

Wilmar bid too low, says Goodman Fielder

BLAIR SPEEDY AND BRIDGET CARTER THE AUSTRALIAN APRIL 29, 2014 12:00AM

Singaporeans bid big on Australian food giant 3:48

Singaporeans bid big on Australian food ...GLOBAL FOOD FORUM
GOODMAN Fielder is the latest Australian food manufacturer to attract the attention of foreign buyers, with Singaporean agribusiness giant Wilmar International lobbing a $1.27 billion joint-venture takeover bid more than two years after it snapped up 10.1 per cent of the company.

The Goodman board has described the 65c-per-share offer from Wilmar and $5.1bn Hong Kong investment manager First Pacific as both undervalued and opportunistic, but signalled it was willing to negotiate, stopping short of rejecting the bid and appointing Credit Suisse as financial adviser.

The offer arrives at a particularly vulnerable time for Goodman, coming just weeks after the April 2 earnings downgrade — the company’s fourth since 2011 — and warnings that further asset writedowns were likely this year following $700 million in write-offs over the past three years, sending Goodman’s shares plummeting as much as 20 per cent to a 19-month low of 47.5c.

However, it underlines the strategic value of Australian food businesses to international investors, following a string of foreign takeovers of Australian food and agricultural businesses aimed at capitalising on the rapid growth of demand from nearby Asia, with Canadian dairy giant Saputo’s $500m-plus takeover bid for Warrnambool Cheese & Butter merely the most high-profile example of a widespread trend.
Other recent deals include China’s Bright Food in January adding West Australian cheese and yoghurt producer Mundella to the Manassen Foods business it bought in 2011 and Hong Kong-based investor William Hui paying $70m in February for Melbourne milk supplier United Dairy Power, while US-owned Archer Daniels Midland offered $3.4bn for GrainCorp last year only to be knocked back by Joe Hockey.

Investors are expected to lobby the Goodman Fielder board this week to engage with the Wilmar-First Pacific consortium, which has appointed Merrill Lynch and UBS as advisers.

Paul Skamvougeras, deputy head of equities with 12 per cent shareholder Perpetual, said he agreed with the board that the offer was opportunistic but urged them to negotiate for a higher price.

“We are encouraging the company to continue the dialogue with Wilmar to extract higher value for shareholders,” he said.

The deal is subject to a scheme of arrangement and due diligence scrutiny of Goodman’s books, meaning it cannot proceed without agreement from the board.

Mr Skamvougeras said Goodman’s recent profit downgrades had been largely driven by one-off factors, while attempts to sell off or find a joint venture partner for its $500m-plus dairy business could release some value for shareholders.

It is understood that Goodman Fielder was asking at least $500m for its dairy assets, based on recent comparable deals, while the Wilmar-First Pacific offer was believed to be aimed at retaining the dairy business.

Credit Suisse is understood to have previously offered the dairy business to Chinese companies Bright Foods and Mengniu Dairy, while New Zealand dairy giant Fonterra has also been mooted as a potential buyer.

Wilmar, which in 2011 paid $1.75bn for Australian sugar refiner Sucrogen — formerly known as CSR — has had its eye on Goodman since February 2012, when it accumulated a 10.1 per cent holding at 60c a share, establishing a blocking stake that effectively ruled out any rival bids.

The Singaporean company, valued at $19.3bn, subsequently made a overtures to the Goodman board but was rebuffed — something that was only revealed by Wilmar chairman Kuok Khoon Hong in August last year, when he also said he was now ready to sell Wilmar’s stake if he could achieve “a good price’’ — a move he has apparently decided against.

The bid consortium is pitching the 65c per share offer as a 23.8 per cent premium to Goodman’s closing share price on April 23 and a 27.2 per cent premium on its weighted average share price since the April 2 downgrade.

However, both comparison figures exclude trading on April 24, when Goodman shares jumped as much as 10 per cent on what the bid team described as “abnormal volume” of 15 million shares — the last day of market trading before the two companies met to discuss the bid. Using that day’s closing share price of 55c as a comparison, the offer price represents a premium of 18 per cent.

Even when the company’s $500m in debt is added to the offer price — as the buyers, Wilmar and First Pacific would become liable for the debt — the offer represents a multiple of only 7.9 times consensus forecasts for Goodman’s earnings before interest, tax, depreciation and amortisation this financial year, a little over half the 14 times earnings Saputo paid for WCB.

However, market sources said Goodman had been unsuccessfully offered up for potential sale to private equity investors over the past year, diminishing the company’s negotiating power and the likelihood of a rival bidder emerging to prompt a higher bid.

Goodman shares closed at 63.5c, up 8.5c for the day.

[greengiraffe]

Interesting how did the Kuoks and Salim come together - odd bed fellows...

Bankers stir Goodman interest

BRIDGET CARTER AND BLAIR SPEEDY THE AUSTRALIAN APRIL 30, 2014 12:00AM
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INVESTMENT banks are canvassing private equity investors for interest in making a rival bid for food manufacturer Goodman Fielder, amid signs any offer will need to top $2 billion in order to succeed.

Singapore-based Wilmar International, the world’s largest palm-oil producer and owner of a 10.1 per cent stake in Goodman, teamed up with Hong Kong-based investment manager First Pacific to make a full takeover bid at 65c per share last weekend, valuing the target company’s stock at $1.27bn.

The Goodman board has described the offer, which comes just weeks after the company’s fourth profit downgrade in less than three years knocked its shares to a 19-month low of 47.5c, as opportunistic and under­valued, but has indicated it is open to negotiations.

Market expectation of a higher bid emerging increased yesterday, with Goodman shares closing up 3.5c at 67c. However, it is believed investors are holding out for an offer of between 70c and 80c per share, which would boost the total price as high as $2.1bn, including Goodman’s existing debt of $500 million.

It is also understood Goodman, which owns grocery staples such as Meadow Lea margarine and Buttercup bread, would allow due diligence scrutiny of its ­accounts to any bidder whose offer tops 70c per share.

CIMB analysts Alexander Beer and Daniel Broeren said they believed the company was worth 75c a share based on the ­average earnings multiple in similar deals, but JPMorgan analyst Stuart Jackson said he believed 65c was fair, and warned that Wilmar and First Pacific could drop their price if they disliked the look of the accounts.

A number of dealmakers have shopped Goodman Fielder around to private equity investors over the past year as a potential takeover target, but sources said no buyer had seriously pursued what is widely perceived as a challenged business.

Among the investors familiar with the Goodman Fielder is ­Pacific Equity Partners, which launched an unsuccessful $3.55bn takeover for the group with Bain Capital in 2005 when it was owned by Burns Philp.

Paul Skamvougeras, deputy head of equities at 12 per cent shareholder Perpetual, urged Goodman’s board to negotiate with the suitors.

Meanwhile, it is understood Goodman Fielder and advisers Credit Suisse are preparing information memorandum documents for the sale or partial sale of Goodman Fielder’s $500m-plus dairy business, likely to be completed in about a month.

First Pacific owns Indofood, the largest dairy company in Indonesia, and it is understood the company’s interest in Goodman Fielder is driven mainly by the presence of its dairy assets, while Wilmar, owner of Australian sugar processor Sucrogen, is keen on other parts of the business.

[Behappyalways]

A Tangle of Conflicts: The Dirty Business of Palm Oil
http://www.spiegel.de/international/worl...67198.html