Australia's oldest dairy producer yesterday fell under foreign control after Canada's biggest milk processor finally secured more than half the shares in Warrnambool Cheese & Butter Factory.
Montreal-based Saputo ended a months-long, three-way tussle for Warrnambool after it grabbed 52.7 per cent of the 125-year-old company.
Warrnambool, which makes Great Ocean Road cheese and Sungold milk, has more than doubled in market value since an initial bid by Bega Cheese in September triggered a contest with Saputo and Melbourne's Murray Goulburn Cooperative.
The deadline for the full takeover offer, which values Warrnambool at a maximum of $537 million and had been due to expire yesterday, will be extended by a fortnight.
"Saputo has to find financial gains in Asia to justify a large purchase here as a beachhead acquisition," said Paul Jensz, a Melbourne-based analyst at PAC Partners.
"It's a stretch from a financial point of view."
Warrnambool yesterday rose 1.2 per cent to close at $9.42.
Saputo has said it will pay up to $9.40 a share should it obtain more than 75 per cent of the company and $9.60 a share it gets 90 per cent.
Observers believe the Warrnambool buy will give Saputo the export infrastructure and production capacity it needs to service demand for dairy in Asia.
Rabobank has estimated that milk consumption will jump by 27 per cent between 2012 and 2020, to 14 billion litres, in South-East Asia's six biggest economies.
Saputo emerged as a strong suitor after Bega withdrew its offer last month and agreed to sell its stake to the Canadians.
Mr Jensz said Saputo should seek to secure Murray Goulburn's 17.66 per cent stake and Kirin Holding's 10 per cent interest in Warrnambool.
Murray Goulburn, Warrnambool's second-biggest shareholder, has offered $9.50 a share in a bid that requires approval from Australia's competition regulator.
It said it was still considering its options.