Goodman Fielder major shareholder Perpetual Investments says it backed a sweetened $1.37 billion takeover bid for the food processor because it represented appropriate value and ''there was no tangible alternative to get a better price in the near term''.
Perpetual and fellow major shareholder Ellerston Capital paved the way for Friday's deal by accepting a revised offer from Singapore's Wilmar International and Hong Kong's First Pacific on Thursday, before Goodman board approval.
Perpetual deputy head of equities Paul Skamvougeras said the decision to back the deal was all about value.
''It represented appropriate value for the company and was a reasonable price given the circumstances that the company has found itself in,'' he said.
''We thought they [Wilmar and First Pacific] would walk away and there was no tangible alternative to get a better price in the near term.
''We were guided by keeping the best interests of unit holders front of mind.''
Goodman's suitors had raised their offer from 65¢ to 70¢, plus a 1¢ dividend, and gave the target's board a deadline of Friday night to accept.
Perpetual and Ellerston - who together make up 25.3 per cent of Goodman's registry - may have had their hand forced by the deadline, and by accepting, in turn forced the Goodman board to roll over. Both shareholders struck share purchase agreements to sell part of their stakes, pushing the bidding duo's joint holding to the ''takeover threshold'' of 19.9 per cent, followed by full exits. But the deals were contingent on Goodman's board accepting the offer.
Goodman, the maker of brands such as Wonder White bread, White Wings flour and Meadow Lea margarine, has put investors through years of restructuring and profit downgrades. Last month it unveiled a 15 per cent profit downgrade and flagged further asset write-downs.
There was likely some concern that Goodman shares would struggle to trade near the post-takeover offer levels if the bid had fallen over. The offer provided far more immediate certainty than the turnaround initiatives Goodman has been running, including a sales process for its New Zealand dairy business.
Oils trader Wilmar and investment company First Pacific are understood to be keen to invest in Goodman and expand its base, including through acquisitions. The sweetened offer represented a 37 per cent premium to Goodman's average share price in the two weeks leading up to the bid. It values the company at $1.37 billion, or $1.9 billion including debt.