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Thursday, January 16, 2014

RPT-Kingmaker Bega claims spoils in Australia 'dairy wars', (TSE: SAP.TO)

Bega Cheese Ltd will walk off with a pile of cash and a kingmaker role in Australia's "dairy wars" after virtually handing control of the country's oldest milk and cheese producer to a Canadian suitor.Bega agreed on Thursday to sell its 18.8 percent stake in takeover target Warrnambool Cheese and Butter Factory Holdings Co to Saputo Inc. That effectively ends a takeover battle Bega itself started last year but abandoned as offers spiralled.With the dust about to settle on one Australia's most intense bidding wars in years, Bega now has a A$70 million ($62.5 million) windfall, wiping out debt and freeing up funds for new products or acquisitions.Its position of strength, along with company statutes that would deter bidders, also means it hopes to stay independent even if international suitors call in what has become one of Asia's hottest food and drink sectors.

Saputo Inc. produces, markets and distributes an array of dairy products in Canada, the United States, Argentina and Europe, as well as bakery products in Canada. Shares of SAP traded higher by 1.45% or $0.74/share to $51.68. In the past year, the shares have traded as low as $46.01 and as high as $54.62. On average, 281414 shares of SAP.TO exchange hands on a given day and today's volume is recorded at 286188.