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Ahead of the imminent takeover of Capilano by a consortium of private investors, Bega Cheese has announced its support for the deal.
Bega, the second largest shareholder in Capilano, plans to vote in favour of selling its 15.6 per cent stake in the honey producer to the China-focused consortium.
The consortium of Wattle Hill and ROC Capital, called Bravo BidCo for the purposes of the takeover, recently increased its bid for the honey producer to $21 per share from $20.06.
Worth $198.6 million, the deal will see 100 per cent of Capilano shares transferred to the consortium.
Earlier this month, Capilano chairman Trevor Morgan said the new deal is an even better result for shareholders.
"We are very pleased to be able to announce this increase to the Cash Consideration, which represents an even better deal for Capilano shareholders," says Morgan.
"The Capilano Directors unanimously recommend that Capilano Shareholders vote in favour of the Scheme, in the absence of a Superior Proposal, and subject to the Independent Expert continuing to conclude that the Scheme is fair and reasonable, and in the best interests of, the Capilano Shareholders."
BEHIND THE DEAL
Over the last few months the transaction has been the subject of a variety of bewildering plays from shareholders.
After announcing the proposed takeover, controlling stakeholder Kerry Stokes increased his stake in the business to 21.7 per cent of voting power.
In the background was an ongoing development regarding allegations made against Capilano that it was selling fake honey.
Capilano slammed media reports from the Sydney Morning Herald and the ABC that it may be unwittingly selling fake honey after nuclear magnetic resonance (NMR) testing revealed that Allowrie's Mixed Blossom Honey was 'adulterated' in a majority of samples.
However, as reported by The Australian, the SMH and the ABC failed to disclose a crucial fact; the law firm that commissioned the report on the fake honey was acting for Roc Partners and Wattle Hill. Once this conflict was revealed the law firm behind the report, King & Wood Mallesons, removed itself from acting for the bidders.
Shares in Bega are down 0.75 per cent to $5.96 and shares in Capilano are up 1.07 per cent to $20.86 per share at 10.54 am AEST.
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