MGC 0.00% 43.0¢ mg unit trust

Takeover deal

  1. 840 Posts.
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    Just wanna create a new thread for everyone to discuss the potential takeover deal.

    My opinion: Taking over MGC is not easy, takeover by foreign investors is much harder.
    1. As MGC is still the largest dairy company in Australia, FIRB may not approve foreign companies`s offer due to strategic or other reasons;
    2. Most of us already know MGC`s tricky capital structure, and i believe all the bidders know for sure. If they still submitted the offer, they must be confident that they can get 90% of the vote from dairy farmers.
    3. It all comes down to MGC`s intrinsic value. Great access to largest group of dairy farmers in Australia, established channel to retailers and consumers, Devondale, the most valuable asset and brand in MGC, contributed about $500m revenue last FY.

    All in all, I believe $1.2 offer from Yili group is fair and reasonable and farmers will take it very serious as it represent 20% premium on farmers` initial share; very likely that the offer is a strategic investment,rather than a takeover offer.
 
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