Warrnambool Cheese and Butter Factory’s butter-making room. Jason Hutchins moves butter boxed onto pallets.INTERNATIONAL business interests are poised to buy a stake in Warrnambool Cheese and Butter (WCB) with the lifting of it shareholder cap inviting market interest.
Nanjing Night Net

Corporations based in Qatar, China and Singapore are all believed to be eyeing off shares in the milk processor with the company.

Both domestic and international investors have had their sights set on the Allansford-based manufacturer in recent years with rivals Murray Goulburn, Bega and Canadian-based Saputo all registering varying degrees of interest over time.

The safeguard to prevent another company taking a controlling stake was lifted in May 2011 when WCB dissolved its 15 per cent shareholder cap.

Any business seeking a 20 per cent or larger portion of the milk processor had to do so openly and not in secrecy.

Bell Potter Securities stockbroker Bill Richmond said the present WCB share price did not reflect the chatter surrounding a buyout. He said the processor was the target of a serious buy-out some years ago but no strong moves have been notched up since.

“The share price reality does not reflect the speculation surrounding WCB,” Mr Richmond said.

“Having said that, the company has consolidated its position at a retail level by opening up new sale areas for its physical product.”

Analysis by financial group RBS Morgans last month revealed WCB was well placed to fund growth opportunities given the strength of its balance sheet.

“WCB’s aim is to build a portfolio of higher margin products,” the report stated.

“We believe it is inevitable that WCB will be involved in the consolidation of the sector in one form or another.”

Several companies have expressed interest in either taking over the company or holding a significant stake as the shareholder restrictions eased over the past three years.

Rival processor Murray Goulburn have made several attempts to incorporate WCB into its operations during 2009 and 2010.

WCB board chairman Frank Davis was unavailable when contacted by The Standard yesterday.

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