The world’s largest dairy exporter, Fonterra, has bought a 6% stake in Bega Cheese, causing the Australian dairy business’s shares to lift 9.75% in early trade.
Fonterra said in a statement it had purchased 9.3 million shares in Bega at $4.95 a share, equating to a total cost of $46 million.
The move by Fonterra comes as Bega is one of three businesses locked in a battle for the purchase of the Warrnambool Cheese and Butter Factory.
Fonterra chief executive Theo Spierings said in a statement Australia is an important market for the company.
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“There has recently been a lot of consolidation activity in the Australian dairy industry. It is important that Fonterra participates, and we have confidence in Bega and the strategy it is pursuing,” he says.
David Jones enjoys sales lift
David Jones has reported a slight lift in its first-quarter sales, with strong growth in its fashion and beauty categories.
The retailer said first quarter sales had lifted 2.1% on this time last year, to $424.2 million.
Online sales also had a good quarter, with outgoing chief executive Paul Zahra saying online sales increased over 1000% in the first quarter.
On October 1, he added, the electronics business was successfully transferred to David Smith.
“We are working towards having the products in this category available on our webstore in time for Christmas trading,” Zahra said.
Slight fall on ASX
The Australian sharemarket is largely unchanged this morning, being slightly lower in morning trade.
At 1100 AEST, the benchmark S&P/ASX200 was down 0.15% to 5417.6, while the broader All Ordinaries index lost 0.16% to 5411.7.
Writing before the market opened, Rivkin global analyst Tim Radford wrote that markets are expected to be largely flat until the release of Chinese manufacturing purchasing managers index figures at midday.
“Historically, when equities have a great year through to October, they normally finish the year strongly with momentum carrying broader markets another 3-11 per cent higher,” Radford added.
“As the S&P/ASX 200 Index consolidates just above 5,400, signs of a buoyant housing market after yesterday’s much better than expected building approvals could be the beginnings of strengthening economic growth… If we see the trend of an improving housing market continues over the coming months, the broader Australian economy will likely benefit, helping buoy investor sentiment.
“The Australian sharemarket trading at multi-year highs is highly reflective of an improving domestic economy. And with the housing market clearly on the up, we should see improving economic trends help support the Australian share market over the coming months.”