Warrnambool Cheese & Butter Factory (WCB) has labelled Bega Cheese's (BGA) takeover bid "highly opportunistic" and urged shareholders to take no action as it continues to mull the offer.
In a statement to the Australian Securities Exchange, the dairy producer said its "highly favourable" growth prospects had made it an attractive target.
The WCB board is currently review Bega's offer for 1.2 Bega shares plus $2.00 cash for every WCB share with the assistance of its legal and financial teams.
It highlighted an "improving product mix, higher margins and earnings diversification" as important factors as it continued to weigh up the bid.
"These initiatives, as well as an expected improvement in short to medium term fundamentals in global dairy markets, including a substantial weakening of the Australian dollar, provide a positive outlook for WCB’s future growth and profitability and will create significant value for shareholders," the company said.
"WCB directors will assess these factors as we consider whether Bega’s offer adequately reflects the value of the WCB business today, the expected future earnings uplift from the initiatives currently underway and the improving market conditions."
WCB said further recommendations would be outlined in its forthcoming target statement response to the offer.
Bega is part of the Uncapped 100.