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Bellamy’s share price: where next as $1.5bn takeover approved?

The Bellamy’s share price has edged to the $13.23 mark after the company announced that the Supreme Court of New South Wales had approved Mengniu’s $1.5 billion takeover offer.

Was there ever actually a conspiracy to push down Bellamy’s (ASX: BAL) share price, thus making it a potentially more attractive takeover target?

Or was such speculation – the kind you may see in a day-time straight-to-TV-movie – nothing more than that: a fiction?

That was the key question we pondered when we first reported on Mengniu’s $1.5bn takeover bid. Or specifically, and in the words of Greens Senator Peter Whish-Wilson, there was the calling for an investigation into:

‘Whether any actions by the Chinese government, including withholding import approvals, constitute a conflict of interest and could reasonably be seen to be market manipulation.’

Either way, such musings are of little consequence at this point. Likely to the relief of shareholders in Australia and abroad, at 15:25 AEDT today Bellamy’s revealed that Mengniu’s takeover bid had been approved by the Supreme Court of New South Wales.

This caps off the last requirement for the $1.5bn takeover to be finalised, with Bellamy’s receiving FIRB and shareholder approval in the weeks prior to today’s afternoon announcement.

Bellamy’s share price: where next?

Ultimately, the nature of the takeover deal has today remained unchanged: Bellamy's shareholders will receive $13.25 cash per share – for those holding the company's stock as of 19.00pm AEDT, 17 of December – according to today’s release.

This will be made up of a $12.65 cash per share payment, made by Mengniu; as well as a fully-franked special dividend of 60 cents per share, paid by Bellamy's.

Commenting on when the situation will truly be finalised, the company noted that:

'The Scheme Consideration will be paid by Mengniu on the implementation date, which is scheduled to be on Monday, 23 December 2019. The Special Dividend will be paid by Bellamy's on the implementation date, immediately prior to implementation of the Scheme.'

The Bellamy’s (ASX: BAL) share price moved in-sync with these details, edging up to $13.23 per share as today’s session came to a close.

As was alluded to: this deal does look to be in the best interest of shareholders, overall. Indeed, when the Mengniu takeover was first announced, the price on offer, representing a '54% premium to the 3-month volume weighted average price to 12 September 2019 of $8.59’ did indeed cater to shareholder interests.

That is of course unless you bought in or around Bellamy’s March 2018 peak – when the company’s stock floated around the $20 per share mark.

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This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

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