Wilmar International

[mrEngineer]

Good article. Initially I was thinking about the quality control of the palm oil in the mills. Not keen to say further as vested.

[greengiraffe]

PEP ponders entry into Goodman Fielder battle

Edited by Sarah Thompson, Anthony Macdonald and Gretchen Friemann
447 words
5 May 2014
The Australian Financial Review
AFNR
English
Copyright 2014. Fairfax Media Management Pty Limited.
It is highly unusual for a private equity firm to enter a takeover battle for a listed company. But last week ended with plenty of speculation Singaporean agribusiness Wilmar International could face competition in its $1.3 billion bid for Goodman Fielder.

Wilmar already owns 10.1 per cent of Goodman and launched a 65¢ a share bid – along with Hong Kong investment manager First Pacific – last Monday. Goodman described the offer as "undervalued" and "opportunistic", but indicated it would be willing to negotiate and appointed investment bank Credit Suisse as an adviser.

However, it is understood that private equity firm PEP is weighing up its options. PEP is familiar with the maker of Wonder White bread and Meadowlea margarine having made an unsuccessful $3.6 billion bid with Bain Capital in 2005 back when Goodman was owned by Burns Philp.

Market sources said PEP had sounded out advisers for a potential tilt. With UBS working for Wilmar, Citigroup is seen as the most logical candidate. For their part, sources close to PEP claim it is more a case of investment banks pitching a rival bid to them.

Whatever the case, it is no surprise PEP is interested. The firm has raised $1.1 billion for a fifth fund and is on the hunt for new investments as it sells out of assets such as industrial services group Spotless and cinema operator Hoyts.

Whether or not PEP's interest turns into a concrete offer remains to be seen. Not only are private equity firms reluctant to get into listed takeover wars, but PEP also faces the issue of Wilmar owning that 10.1 per cent stake. Wilmar secured the shareholding more than two years ago, giving it the ability to block any rival bid for full control. The main game, of course, remains the bid that is actually on the table. The Wilmar/First Pacific team are, by all accounts, getting increasingly frustrated about what they describe as a lack of engagement by the Goodman side.

The offer was well timed given Goodman announced yet another earnings downgrade – the fourth in the past three years – on April 2.

[mrEngineer]

Interesting. Maybe PEP going in with strategic trade sale in mind. And Wilmar does not need to pay out its capital nowm

[greengiraffe]

confusing conglomerate... they can't get their sugar business in order and still bidding for another tough business in Goodman Fielder...

http://infopub.sgx.com/FileOpen/Wilmar_1...eID=296038

[cfa]

WILMAR POSTS EARNINGS OF US$162 MILLION FOR 1Q2014

- Core net profit excluding non-operating items down 32% to US$215 million

- Strong performance from Plantations & Palm Oil Mills and Consumer

Products

- Palm & Laurics margins remained healthy, supported by margin

enhancement from higher value-added downstream products

- Oilseeds & Grains affected by negative crush margins in the industry

- Seasonal losses in Sugar



No analysts got it right , Some even have forecasted NP of US$300m. missed by many miles.

[greengiraffe]

Wilmar threatens Goodman
BLAIR SPEEDY THE AUSTRALIAN MAY 09, 2014 12:00AM

SINGAPOREAN agribusiness Wilmar has slammed food manufacturer Goodman Fielder over its plans to sell off its New Zealand dairy business, saying it will scrap its $1.27 billion takeover offer if the sale proceeds.

Goodman’s adviser Credit Suisse has sent an 11-page “information flyer” to potential buyers of the dairy business, stating it has average revenue of $NZ500 million ($461m) and earnings before interest, tax, depreciation and amortisation of about $NZ60m.

The valuations appear at odds with a Credit Suisse document sent to potential buyers of the business in March, which estimated the division would report earnings of just $32.1m in the current financial year.

The lower estimate was made before Goodman issued an earnings downgrade on April 2, driven partly by an increase in NZ milk costs, which would have lowered the number even ­further.

However, the EBITDA estimate of $32.1m was made before the March 31 sale of the loss-making smallgoods business, which reported earnings as part of the dairy division, and did not include earnings from the company’s Asian dairy operations, among the assets now for sale.

The flyer makes clear that the $NZ60m earnings estimate adds back the smallgoods losses and Asian earnings, and is calculated as an average of EBITDA across the past four years.

Wilmar, which owns a 10.1 per cent stake in Goodman, said any asset sale could prompt it to take off the table its indicative 65c per share offer.

“It is a condition of our indicative proposal that Goodman Fielder does not make any material asset sales,” a company spokesman said.

“Any potential sale of the NZ dairy business needs to be weighed against the risk it poses to the certainty of a full cash offer for the entire business. Goodman Fielder shareholders risk losing that offer and being left holding an investment in a diminished vehicle if any asset sales are conducted.”

Sources close to the Wilmar camp have accused Goodman of pushing ahead with the dairy sale, which had been flagged as early as February, as a tactic to leverage a higher bid.

CIMB analysts Alexander Beer and Daniel Broeren have said they believed the company was worth 75c a share based on the ­average earnings multiple in similar deals.

[LLI]

Hi greengiraffe,

why do you say they cant get their sugar business in order? I am abit confused by that, sugar business seem fine to me.

confusing conglomerate... they can't get their sugar business in order and still bidding for another tough business in Goodman Fielder...

http://infopub.sgx.com/FileOpen/Wilmar_1...eID=296038

[CityFarmer]

Report in Wilmar's 1Q result.

Wilmar net drops 49% on China soybean crushing, shares plunge

Wilmar International, the world’s largest palm oil trader, fell by the most in 18 months in Singapore trade after first-quarter profit fell 49%.

Net income was US$161.8 million ($202 million) in the three months ended March 31 from US$315.4 million a year earlier, as seasonal losses at its sugar unit were compounded by shrinking margins in soybean crushing and palm refining. The result missed an estimated range of US$298 million to US$321 million by DBS Vickers Securities and a US$200 million to US$220 million range estimate from UOB Kay Hian Holdings.

“It’s disappointing,” Ben Santoso, an analyst with DBS Vickers, said by phone. “The plantations and consumer products were ahead of expectations, but they couldn’t offset the drop in processing margins in soybean and palm.”

Wilmar fell 4.5% to $3.19 at 10 a.m. in Singapore trading, the biggest decline since August 15, 2012. The results were announced after the market closed yesterday.
...
http://www.theedgesingapore.com/the-dail...lunge.html#

[Temperament]

It's getting more & more interesting.

[mrEngineer]

I am surprised with such large decline of profit for a large major player. It will be interesting to have a a look at golden agri soybean business to see whether it is a systemic issue.

Maybe this also explains why Wilmar has been active in inorganic growth to boost their eps lately