The share price of Australian company Goodman Fielder shot up today (April 28th) after the firm revealed it has turned down a massive joint takeover bid for the business.
It was announced by the company that it has rejected an offer from Singapore's Wilmar and Hong Kong's First Pacific that was worth $1.2 billion (£700 million). The bid valued stocks at 65 Australian cents a share, compared with the closing price of 55 cents at the end of trading on Friday. Stocks rose above that valuation following the news breaking today.
Goodman Fielder said in a statement that the bid has "materially" undervalued the firm and was "opportunistic" and therefore it had been turned down.
The company, which owns famous Australian food brands such as Meadow Lea margarine and Praise condiments, added the board "remains focused on maximising shareholder value and will be constructive in relation to proposals which are consistent with this objective".
Wilmar said in a statement to the Singapore Exchange that if the deal had gone through, Goodman Fielder would have therefore been equally owned between Wilmar and First Pacific.
Goodman Fielder manufactures and distributes staple foods such as bread, milk, salad dressings, cooking oils and flour across Australia, New Zealand and the Pacific Islands.
Shares in the company rocketed today on the back of the news the joint takeover bid had been rejected immediately. During today's trading session on the New York Stock Exchange, the share price of Goodman Fielder shot up by 20 per cent and ended the day at 69 cents.
That sharp rise in the share price of Goodman Fielder is perhaps an indication the company had been undervalued by the joint takeover bid, but Wilmar and First Pacific may come in with another offer at a higher price in the future.
Wilmar already holds a 10.1 per cent stake in Goodman Fielder. A statement from Goodman Fielder reiterated that the board of the company is still concentrating on its strategic targets, adding: "The board of Goodman Fielder remains focused on maximising shareholder value and will be constructive in relation to proposals which are consistent with this objective."
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