30/11/2004 - 21:00

Interest high in PB Foods

30/11/2004 - 21:00

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SEVERAL possible buyers have emerged for dairy icon Peters & Brownes (PB Foods) amid speculation the operation could be sold by its owner, Fonterra, to clear the way for a $1.62 billion takeover bid of Aust-ralian diary company National Foods.

Interest high in PB Foods

SEVERAL possible buyers have emerged for dairy icon Peters & Brownes (PB Foods) amid speculation the operation could be sold by its owner, Fonterra, to clear the way for a $1.62 billion takeover bid of Aust-ralian diary company National Foods.

Challenge Australian Dairy, a company 51 per cent owned by Singaporean company QAF and 49 per cent by the 140 farmer-owned Challenge Dairy Cooperative, has already indicated interest in buying some of Peters & Brownes assets, should they become available.

CDC chairman Larry Brennan said Challenge would be “very interested in looking at buying any of the Peters & Brownes assets”.

Coca Cola Amatil chief executive Terry Davis has reportedly said CCA would be interested in any flavoured milk and yoghurt offerings that came onto the market as part of the takeover battle.

New South Wales dairy business Dairy Farmers is also understood to be interested in parts of the business that come onto the market.

Dairy Farmers recently opened an office in Western Australia.

Also expressing interest is former Peters & Brownes chief Graham Laitt, who headed the organisation until it was fully taken over by Fonterra.

“I’d be interested in buying it [Peters & Brownes]. It’s whether I could afford it,” he said.

“Peters & Brownes would be about a $500 million company.”

Elders is another group reported to be chasing an interest in dairy processing. WA Business News was unable to contact Elders managing director Greg Hunt for comment.

Mr Laitt said one difficulty facing prospective buyers would be to separate the milk and ice-cream businesses.

“They are all on the one site. The trucks that bring the milk for the whole milk side also collect the milk for the ice-cream business,” he said.

Other industry watchers have no such concerns, suggesting it would simply be a matter of separating out the brands.

Fonterra has already flagged the possibility of selling part or potentially all of its Peters & Brownes business to clear any regulatory hurdles to its takeover.

It appears most likely Fonterra would divest some or part of Peters & Brownes’ whole milk and flavoured milk brands, rather than its ice-cream business, which is the largest in the Southern Hemisphere.

Australian Competition and Consumer Commission WA regional director Sam Di Scerni said the commission had flagged concerns over the proposed takeover, espec-ially with regard to its effect on competition in WA’s milk market.

Mr Di Scerni said he could not make any further comment on how the commission viewed the takeover, however.

Between them, National Foods and Peters & Brownes make up about 90 per cent of the State’s whole milk market.

The two companies also account for about 95 per cent of the flavoured milk market.

WAFarmers dairy section president Tony Pratico said some dairy farmers were concerned that Peters & Brownes would divest its milk assets.

“It’s a bit of a surprise to some of the guys that Fonterra is selling the only assets it owns holus bolus in Australia as part of this takeover,” he told WA Business News.

“One thing we know for sure about Fonterra is that anything of value they will keep.”

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

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