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Dairy company chases dairy producer

26-Nov-2001

Australian dairy company National Foods Ltd said on Monday it would make a A$77 million (45 million euros) cash offer for Australian dairy producer King Island Company Ltd.


National Foods said it would offer A$3.25 cash for each King Island share, valuing King Island at A$77 million (45 million euros), as it seeks to boost its sales of premium cheeses and cream.


King Island shares leapt 10.4 per cent to A$3.19 (1.87 euros)after a trading halt was lifted in a higher overall morning market. National Foods stock gained 1.5 per cent to A$2.71 (1.59 euros)


King Island directors unanimously recommended the offer, which is expected to be earnings-accretive in the first full year of ownership for National Foods.


"It will deliver a platform for further growth in the high value-added sector of the cheese market and an opportunity to leverage off King Island's technical expertise in our existing cheese business," National Foods managing director Max Ould said in a statement.


National Foods said it would fund the acquisition by debt facilities.The company told shareholders two weeks ago it was pursuing small acquisitions of probably less than A$100 million (58.7 million euros).

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