The Australian Securities Exchange has requested information from dairy firm Warrnambool Cheese and Butter Factory as to why they withheld news of the unsolicited takeover offer from the public domain.

WCB received a ‘speeding ticket’ yesterday from the ASX querying as to whether there was any reason for the sharp surge in their share price in recent days. The company responded by saying that they had received a takeover offer – which the Board had already turned down, although maintained that it was unlikely this news was responsible for the rise. Instead, they pointed to the low volume of shares usually traded and improving dairy market conditions as likely reasons for the surge.

The ASX, not convinced by the response, remained concerned that the knowledge of the takeover offer had not been disclosed immediately and fired off another letter today.

Companies listed on the stock exchange are required to report to the market any material information as soon as possible.

“As you are aware, listing rule 3.1 requires an entity, once it becomes aware of any information concerning it that a reasonable person would expect to have a material effect on the price or value of the entity’s securities, to immediately tell ASX that information. The exceptions to this requirement are set out in listing rule 3.1A,” the letter from ASX Senior Adviser, Issuers, Gonzalo Valencia read.

Valencia went on to query the timing of the takeover offer and why they believed it to not be price sensitive information.

WCB has now responded by confirming they have not broken listing rule 3.1, arguing that the fact they have already dismissed the “inadequate” non-binding offer makes it irrelevant.

Interestingly, the proposal was put to the Board almost two months ago – on October 20.

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