PE group loses Goodman Fielder to IPO

An investment group led by Sydney-based Pacific Equity Partners appears to have missed out on what could have been Australia’s largest buyout to date.

In what was dubbed by the Wall Street Journal an “11th hour bid”, a Pacific Equity Partners-led consortium appears to have failed in an attempt to buy Goodman Fielder from Australian food group Burns Philp & Co for around AU$3.6 billion ($2.6 billion; €2.3 billion) including debt. The consortium also included Bain Capital and Goldman Sachs.

Announcing its rejecting of the bid – which would have been the largest private equity deal yet seen in Australia – Burns Philp confirmed its intention to proceed with its original plan to list 80 percent of Goodman Fielder in Australia and New Zealand in an IPO expected to raise around AU$2.1 billion.

The Wall Street Journal quoted Burns Philp chairman Graeme Hart as saying that the rejection of the consortium’s bid was based not on price but on Burns Philp’s desire to retain a 20 percent minority stake in Goodman Fielder.

The consortium is now understood to have walked away from the deal rather than put together a revised offer. 

Goodman Fielder includes Burns Philp’s baking, spreads and oils division and contributed 78 percent of its parent company’s AU$2.33 billion total sales last year. After listing, Goodman Fielder is touted to buy New Zealand Dairy Foods, a dairy foods and small goods supplier owned by Rank Group.

The listing will make Goodman Fielder the 65th largest company on Australia’s benchmark S&P/ASX 2000 index and the largest quoted food company in Australia and New Zealand.