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Bega says undecided whether to sweeten offer for Warrnambool

Wednesday, 6 Nov 2013 | 11:09 PM ET

SYDNEY, Nov 7 (Reuters) - Australia's Bega Cheese Ltd said on Thursday it has not yet decided whether to sweeten its offer for Warrnambool Cheese and Butter Factory Company Holdings Ltd after its approach was trumped by Canada's Saputo Inc.

Warrnambool is being chased for its export connections to Asia, both for its basic dairy produce and its high-tech milk extracts.

Bega, which owns about 18 percent of Warrnambool, started a bidding war in September. An offer from fellow shareholder Murray Goulburn Co-operative Co Ltd, which holds about 17 percent, followed. Saputo then gazumped both with a A$449 million ($427.67 million) bid.

Bega said its board met on Thursday to consider its current offer of A$319 million and would "continue to consider the matter."

Analysts have speculated that Bega may use scrip instead of cash to boost its offer, taking advantage of a surge in its share price since the bidding war began.

While Warrnambool's market value has nearly doubled to around A$470 million, Bega shares have surged 60 percent as investors have snapped up dairy stock.

Those buyers include Fonterra, the world's largest dairy exporter, and Japanese drinks maker Kirin Holdings Co Ltd . The duo has bought stakes in Bega and Warrnambool respectively and are hovering with intent to influence consolidation.

Bega shares were up 0.6 percent at A$4.84, while Warrnambool rose by the same amount to A$8.55, on Thursday.