Bellamy's shareholders hit jackpot with $1.5 billion takeover offer

Bellamy's shareholders hit jackpot with $1.5 billion takeover offer

Organic milk formula brand Bellamy's has received a takeover offer from a leading Chinese dairy producer.

The proposed deal values the Australian brand at approximately $1.5 billion, and a material premium of 59 per cent compared to the company's last closing share price.

Under the deal, shareholders would receive $13.25 cash per share comprising $12.65 cash per share from the Chinese producer China Mengniu Dairy Company ('Mengniu') and $0.60 per share fully franked special dividend paid by Bellamy's prior to the implementation of the scheme.

Shares have skyrocketed following the takeover announcement, up 54.5 per cent to $12.86 per share at 11.54am AEST.

The board of directors of the listed organic formula brand has come out in favour of the proposal from Mengniu, with Bellamy's chair John Ho saying the deal reflects the value of the company.

"The proposed Scheme is an attractive all-cash transaction at a 59 per cent premium to the prevailing share price," says Ho.

"It reflects the strength of the Bellamy's brand, the dedication of 160 passionate employees and the progress of our turnaround plan."

Mengniu is a leading Chinese dairy manufacturer listed on the Hong Kong Stock Exchange with a market capitalisation of $24.6 billion.

The company has manufacturing sites in New Zealand and Indonesia and distributes its products to Hong Kong, Singapore, Macau, Myanmar and Indonesia.

The deal is subject to a number of conditions including the approval from Bellamy's shareholders, the court and the Australian Foreign investment Review Board.

The takeover offer comes as Bellamy's has emerged optimistic following a rough FY19.

The company posted a statutory NPAT of $21.7 million for FY19, down nearly 50 per cent from FY18's strong $42.8 million profit.

Revenue was also down by 19 per cent to $266.2 million, and EBITDA was down 46 per cent to $34.9 million.

The company blamed its disappointing results on stiff regulation and a lower birth rate, as well as increased competition for Chinese demand.

At the end of the financial year the company began to work on a "transformational rebrand" of the business which Bellamy's says has been gaining momentum since its March launch.

Sales have picked up during Q4 for the business, and Bellamy's says that leading consumer indicators are positive, including an uptick in e-commerce sales, brand interest, and China sales.

Never miss a news update, subscribe here. Follow us on Facebook, LinkedIn, Instagram and Twitter.

Business News Australia

Enjoyed this article?

Don't miss out on the knowledge and insights to be gained from our daily news and features.

Subscribe today to unlock unlimited access to in-depth business coverage, expert analysis, and exclusive content across all devices.

Support independent journalism and stay informed with stories that matter to you.

Subscribe now and get 50% off your first year!

Four time-saving tips for automating your investment portfolio
Partner Content
In today's fast-paced investment landscape, time is a valuable commodity. Fortunately, w...
Etoro
Advertisement

Related Stories

Cyber security consultancy CSO Group to merge with AI enabler xAmplify

Cyber security consultancy CSO Group to merge with AI enabler xAmplify

Sydney-based cyber security consultancy CSO Group is set to join fo...

Toner brothers' AI-driven document processing company Affinda raising $10m for global growth

Toner brothers' AI-driven document processing company Affinda raising $10m for global growth

A Melbourne-headquartered company that uses artificial intelligence...

From Just Jeans to Dotti, Myer proposes merger with Premier's apparel brands

From Just Jeans to Dotti, Myer proposes merger with Premier's apparel brands

Myer's (ASX: MYR) new executive chair Olivia Wirth has wasted l...

Aquila raises extra $2m for optical power beaming tech that charges drones mid-flight

Aquila raises extra $2m for optical power beaming tech that charges drones mid-flight

Sydney-based deep tech startup Aquila has raised a follow-on $2 mil...