Newspaper article The Christian Science Monitor

Buyout of Australian Biscuitmaker Draws Fire

Newspaper article The Christian Science Monitor

Buyout of Australian Biscuitmaker Draws Fire

Article excerpt

THE eagle finally got the parrot.

At least that is the way it was played here Feb. 5 as Campbell Soup Company finally won its takeover bid for Arnotts Biscuits Ltd., one of the oldest companies in Australia.

Campbell has been trying to take over the beloved Australian company with the Rosella parrot on its logo since October and the little bird has been squawking mightily. But the American food giant in the end boosted its 33 percent share to 58 percent.

Two issues predominated. One was pure wallet: Arnotts said Campbell's offer of $1.2 billion (Australian; US$800 million), or $8.80 per share, was too low for a healthy company that had posted a record $53.3 million profit for the December half year. Campbell raised its per-share offer to $9.50 in January. Many saw it as still too low. One independent report valued the biscuitmaker at between $10.78 and $11.32 a share.

What burned people more was the thought that Australia was in danger of losing yet another of its few corporate icons. Already Quantas airlines, Speedo swimwear, Dryza-Bone rain gear, and Vegemite, an odoriferous yeast spread unaccountably loved by many, have all been bought by foreign companies. Arnotts officials have said that surrendering would be like selling Ayers Rock.

Both sides resorted to full-page ads exhorting shareholders to sell or not to sell. The Arnotts family, which still holds 25 percent of the shares, put up the biggest fight by forming a shareholders group called Stay Australia Owned, the same initials as the SAO cracker that launched the 125-year-old company.

With national pressure being put on institutional and private shareholders not to sell, Campbell wasn't able to gain the 50 percent it wanted by the time the bid offer was due to close Jan. 29. So it extended it another week. In that time AMP Society, an insurance company that had initially refused to sell, crumbled and sold most of its 8.5 percent stake.

What's gotten lost in the heat of the battle is that Campbell was invited in by Arnotts in 1985 to save it from a takeover by Australian entrepreneur Alan Bond. …

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