Takeover move made for a2 Milk

a2, milk, productA2 Milk Co has received an expression of interest from two associated trade parties keen on taking over the company, which may force the firm to shelve a planned capital raising.

The parties have requested confidentiality and warned their expression of interest could be withdrawn if their names become public, a2 Milk said in a statement.

The dual listed shares climbed 23 per cent to 70 cents on the NZX on Monday morning, the highest level since July last year.

The proposal is subject to conditions including due diligence, exclusivity, no material adverse change in the company’s affairs, New Zealand Overseas Investment Office approval, and no change in the number of shares on issue.

“The last condition is particularly relevant as the company was well advanced in planning for an equity raising,” the company said.

A2 Milk’s board is seeking further information to evaluate the proposal before updating the market and said no further comment would be made at this time.

The single biggest shareholder in the company is Australian based Freedom Food Group with 19.14 per cent, which increased its stake this month.

First NZ Capital, and Milford Asset Management also both gave notice of substantial shareholdings this month.

When a2 Milk listed on the ASX earlier this year it didn’t include a capital raising despite a launch into the US market with fresh milk which is budgeted to cost around $US20 million ($AUD26m) over the next three years.

The company markets its products as potentially being beneficial for people who suffer intolerance to the naturally occurring A1 protein in milk, including bloating and stomach pain.

A2 Milk has captured some 9.3 per cent of the Australian fresh milk market by selling milk that only has A2 protein.

BusinessDesk

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