Wilmar, First Pacific's acquisition of Goodman Fielder delayed

SHARES of Wilmar International, First Pacific and Goodman Fielder fell on Monday after the three said they were pushing back the date by which Wilmar and First Pacific's acquisition of Goodman Fielder will be implemented.

Wilmar International fell three Singapore cents, or almost one per cent, to S$3.14 in Singapore; Goodman Fielders' shares dropped one Australian cent, or 1.56 per cent, to A$0.63 in Australia; First Pacific slipped seven Hong Kong cents, or 0.74 per cent, to HK$9.37 in Hong Kong.

The long-stop date for implementing the scheme of arrangement has been pushed back from Dec 31 this year to March 31 next year, as the process to obtain regulatory approval from the Ministry of Commerce in China is now expected to take longer than initially thought. Wilmar said it could not elaborate further when asked for more details.

Accordingly, the meeting of Goodman's shareholders to approve the scheme of arrangement will now likely be held in the first quarter of next year, delayed from the initial date set for November this year.

Wilmar and First Pacific are making a joint takeover bid for Goodman Fielder at A$0.675 a share. As previously announced, Goodman Fielder will also be permitted to pay a final dividend of one Australian cent per Goodman Fielder share for the year ended June 30, 2014, to its shareholders. The offer valued Goodman's equity at A$1.45 billion (S$1.7 billion). This was after a series of price revisions.

Both had originally made an offer for Goodman Fielder at A$0.65 a share in late April. They later raised their offer to A$0.70 a share in May, after securing the support of Goodman's two largest shareholders: specialist fund manager Ellerston Capital (10.64 per cent) and investment management services firm Perpetual Investments (8.94 per cent).

But after four weeks of due diligence led to concerns over the investments needed to turn around the debt-ridden Aussie bread and spreads maker, this was reduced to the current price.

Goodman Fielder has A$549 million in debt and is in need of a massive recapitalisation with around A$350 million in capital expenditure planned in the next couple of years. Goodman Fielder's board has supported the current offer, though it initially rejected the A$0.65 offer.

Wilmar sees Goodman Fielder's business as complementary to its existing consumer business. It also foresees that it could help Goodman Fielder secure ingredients of flour and edible oils at more competitive terms, and also introduce its products into China, where Wilmar has a strong distribution network, its CEO Kuok Khoon Hong said in August.

Goodman Fielder is prized for its top-selling Australian brands, including Meadow Lea margarines and White Wings cake mixes. There has been speculation of Wilmar launching a takeover bid since it first increased its stake in Goodman Fielder to 10.1 per cent in 2012.

Goodman Fielder is listed in Australia and New Zealand, and will be delisted from both markets if the offer succeeds.