Bega Cheese will not lift its takeover offer for Warrnambool Cheese and Butter (WCB) for now, despite a higher competing bid from Canadian suitor Saputo.
Bega said on Friday that it intends to proceed with its offer to WCB shareholders, but "does not presently intend to increase its offer consideration although it reserves the right to do so".
Bega said its offer of 1.2 Bega shares and $2 in cash, which valued WCB at $360.4 million on October 10, represented excellent value.
Bega said it was comfortable with its present offer to merge with WCB based on its view that a strong Australian-owned and listed dairy company would improve returns for shareholders and dairy farmers.
"Some [WCB] shareholders will prefer to be shareholders of an Australian dairy company and support Bega Cheese's vision for the combined group and the synergies that will come from it," Bega said in a statement to the Australian Securities Exchange.
On October 8, Canadian dairy giant Saputo launched a $390 million takeover bid for WCB, at $7 per WCB share.
Shares in WCB closed up 5¢ at $7.27. Bega shares were 12¢ higher at $3.82.