burns to resurrect goodman

Could this have leaked before the announcement came out?......LOL

Burns to resurrect Goodman
By Stephen McMahon
Retail Reporter
September 30, 2005


ONE of Australia's biggest food companies, Burns Philp, is planning to set up and float a new trans-Tasman food company, Goodman Fielder, on the Australia and New Zealand stock exchanges this year.

The decision will generate money for acquisitions for Burns Philp and resurrect Goodman Fielder, which disappeared from the Australian Stock Exchange in 2003 after New Zealand billionaire Graeme Hart bought it for $2.25 billion.

Burns Philp chief executive Tom Degnan said proceeds from the float would be used for acquisitions in Australia, NZ and North America.

"We've been looking for an acquisition for some time now," Mr Degnan said. "We sold our yeast business last year, which freed up capital, and this is just another step in that process."

Burns Philp will retain a significant stake in Goodman Fielder after the float and "appropriate" board representation. Its shares rose 4.2 per cent yesterday closing at a 12-month high of $1.12, up 4.5¢. More than 30 million shares traded, almost seven times the daily average of the past six months.

Mr Hart owns about 57 per cent of Burns Philp after buying the ailing firm in 1997. He has since turned it around and last year sold its US bakery and spice units for $1.35 billion.

Burns Philp, valued at $2.3 billion, also announced the purchase of New Zealand Dairy Foods from Mr Hart's Rank Group.

Mr Hart bought NZ Dairy for $NZ245 million ($A221 million) in 2002. Burns Philp would not disclose either a value for Goodman Fielder or the price paid for NZ Dairy.

Mr Hart, a one-time tow-truck driver, is NZ's third-richest man with an estimated personal fortune of $NZ2 billion from buying and selling undervalued assets.

The newly created Goodman Fielder will merge Burns Philp's existing bread brands including Helga's, Wonder White and Mighty Soft and the spreads and oils divisions — which make Cornwells vinegar and Meadow Lea margarine — with NZ Dairy Foods, which sells flavoured milk, cheese and yoghurt. Last financial year, these units accounted for 78 per cent of Burns Philp's $2.3 billion sales and contributed $190 million of pre-tax profit.

The deal comes six weeks after Mr Hart offered $2.3 billion to acquire Carter Holt Harvey, NZ's biggest forest owner.

Analysts described the re-establishment of Goodman Fielder as an asset merry-go-round. Mr Hart "probably wants money out of Rank to help pay for Carter Holt", said John Norling at Alliance Capital Management in NZ.

Burns Philp has made a conditional tender offer to pay off its three outstanding high-yield US notes. The $1.08 billion needed to buy back the notes would be funded through a mixture of cash and a new debt facility, the company said.

The listing of Goodman Fielder depends on regulatory and shareholder approvals along with other formalities.