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Warrnambool Cheese & Butter Australia: Acquisition and Appraisal

Colette Southam ; Philipp Abold ; Mason Deetman

Reference: IVEY-9B20N034-E
Year: 2017
Number of pages: 14
Geographic Setting: Australia
Publication Date: Sep 8, 2020
Source: Ivey Business School (Canada)
Type of Document: Case
Industry Setting: Manufacturing

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Description

In January 2017, Canada-based Saputo Inc. was preparing an offer to acquire the remaining shares of an Australian dairy firm, Warrnambool Cheese & Butter Factory Co. Hold. Ltd. (WCB). Saputo Inc. had previously acquired a majority of the equity, but minority shareholders prevented Saputo Inc. from delisting WCB from the Australian Securities Exchange. Although WCB was a publicly traded company, the current share price might not reflect its intrinsic value because its shares were very thinly traded, with most shares being owned by Saputo Inc. and a few minority shareholders. Saputo Inc. had to determine an appropriate offer price for the acquisition.

Learning Objective

The case is suitable for undergraduate- and graduate-level courses on mergers and acquisitions or for valuation units in courses in international or corporate finance. Students will undertake comprehensive external and internal analyses, and develop valua