Australian food takeover hots up

The battle over many of Australia's best-known consumer brands hotted up on Wednesday after results from food group Goodman Fielder failed to silence investor concerns over a hostile takeover bid.

Goodman Fielder said it made raw net profits of A$70.2m (£25.6m; 38.6 euros) for the six months to December 2002, up 2.6% on the year before.

The earnings do not take into account a A$30m bonus in 2001 from selling assets, nor a A$3.5m charge in 2002 for the A$2.2bn takeover battle with ingredients firm Burns, Philp & Co.

Burns Philp holds 19.9% of Goodman, which - with brands like Uncle Tobys cereals, Meadow Lea margarine and Buttercup bread - is Australia's number one consumer food company.

No escape?

Although Goodman described 2002 as "positive", it warned that tougher times were ahead.

The drought afflicting Australia has driven wheat and oil prices to sky-high levels, meaning that the company is forecasting 8% lower profits for 2003.

With sales slipping 9.3% from 2001 to 2002, the modest rise in profits will not be enough to help Goodman - which has hired a bank to help it find an alternative bidder - stave off Burns Philp's approach, analysts felt.

"I don't see another party coming through," one told Reuters.

"To try and shake Burns Philp loose, considering they've got 19.9%, is going to be very difficult."

The results were not due for another month, but Australia's anti-trust authorities asked for them to be brought forward to make sure investors had as much information as possible before deciding on the bid.