The takeover battle for Warrnambool Cheese and Butter has turned into a corporate Gordian knot, but the level of complexity is different depending on who is looking at it.
It throws up complications for the new Treasurer, Joe Hockey, because one of the bidders, the Murray Goulburn co-operative, is styling itself as the Australian national champion in the dairy industry.
The Australian Competition and Consumer Commission examined a proposal by Murray Goulburn to take over Warrnambool in 2010, and its preliminary view was that a takeover would substantially lessen competition for the acquisition of milk from dairy farmers in south-western Victoria and south-eastern South Australia.
In its second run at Warrnambool against rival bidders Saputo of Canada and Bega Cheese, Murray Goulburn has lobbed a bid of $7.50 a share cash, and put its case to the Australian Competition Tribunal, where it can argue that the takeover would have national interest benefits that would outweigh any ACCC opposition, should any emerge.
The tribunal will take time to make up its mind, however. It has at least three months to make a decision and can extend the process, and Saputo has already responded to Murray Goulburn by sweetening its cash offer from
$7 a share to $8 a share. Murray Goulburn might match or beat Saputo, but its first task is to slow the process.
It was in the national interest for the Foreign Investment Review Board to deliver a decision on a Saputo acquisition of Warrnambool until the public benefits of a Murray Goulburn takeover had been considered by the competition tribunal, Murray Goulburn said after Saputo lifted its bid to $8 a share.
Foreign investment reviews are not known for being rapid. The US agri-business group Archer Daniels Midland has been waiting seven months for a decision on its takeover offer for GrainCorp, for example.
That deal is taking time, however, because it directly raises issues of national interest by lifting an already high level of foreign ownership of the grain handling industry in Australia, and placing ownership of eastern-seaboard port infrastructure into ADM's hands. Lobbying for and against the deal has been intense, and Hockey has extended the deadline for a verdict until mid-December.
Murray Goulburn's argument is not that a Saputo offer should be blocked. It is that the national champion argument will be sidelined if the Saputo foreign investment decision pre-empts the competition tribunal review of the Murray Goulburn offer.
The implication, however, is that if the foreign investment decision on Saputo's offer is ready before the competition assessment of Murray Goulburn's offer is completed, the Saputo decision should be delayed, and that's a level of intervention Hockey will think about very carefully. Murray Goulburn has a case to argue, but it doesn't automatically follow that another bid should be held up to allow it to happen.
Kirin, of Japan's local brewing, wine, fruit juice and dairy conglomerate Lion, also entered the arena on Tuesday when it paid up to $9.25 a share for a 10 per cent stake in Warrnambool.
Its view on the battle is different. It does not intend to bid, but has a commercial relationship with Warrnambool that it needs to protect. Warrnambool is the supplier of some of its mainstream cheese brands including Cracker Barrel and Coon.
With Bega on the Warrnambool register with 18 per cent and Murray Goulburn on board with 17 per cent, its leverage derives from its ability to help deliver control by accepting one of the offers.
Its leverage is greatest with Saputo, because the Canadian group begins with no shares and will not meet its minimum acceptance condition of 50 per cent if Lion, Bega and Murray Goulburn all retain their stakes.
The view of the battle that Warrnambool's dairy farmer suppliers have is different again. Many of them are Warrnambool shareholders, but milk supply is their most important issue.
They are naturally wary of a foreign bid, but their assessment of the offers is going to involve the same issues the ACCC raised in 2010 when it expressed concern about Murray Goulburn's first takeover proposal.
A successful bid by Murray Goulburn would reduce the number of buyers for their milk, and some will be concerned that the debt Murray Goulburn is taking on to finance the offer will be supported by lower prices at the farm gate.
Murray Goulburn's answer to those concerns will involve an explanation of a second phase of its plan - a post-takeover public listing that sees equity issued and gearing reduced.
For the farmers and arguably for Lion, however, Saputo somewhat counter-intuitively offers a simple outcome: a change of control, but maintenance of the existing matrix of competing buyers and industry partners.