Lion protecting its interests in WCB

Lion chief executive Stuart Irvine says the food and beverages giant will use its 10 per cent stake in takeover target Warrnambool Cheese & Butter to protect its cheese business as the three-way takeover battle intensifies.

Lion, a subsidiary of Japan's Kirin and Australia's third-largest dairy processor, is a potential kingmaker as Murray Goulburn, Bega Cheese and Canada's Saputo fight a $500 million battle for WCB.

In his first public comments on Lion's intentions since the company seized its WCB stake, Mr Irvine said the shareholding was about strengthening Lion's relationship with WCB "in this uncertain period".

"We already have a relationship with them [WCB] through everyday cheese, and that [stake] means we have a seat at the table really to make sure those relations we currently have are looked after during any potential transfer of ownership."

WCB produces the majority of Lion's 12,000 tonnes per annum of everyday cheese under brands such as Coon and Cracker Barrel at its Allansford site near Warrnambool.

Asked whether Lion would increase its stake, Mr Irvine said: "I don't think so, we're pretty happy where we are."

He also rejected reports that Lion was considering selling some of its struggling dairy assets, including National Foods. "I think this stake ... in WCB is a demonstration of our commitment to our future plans," he said.

His comments come as the takeover battle for WCB plays out in front of both the Takeovers Panel and the Australian Competition Tribunal.

Saputo, which has 13.7 per cent of WCB, has been prevented from processing acceptances for its $9 a share cash offer as the panel investigates claims from Murray Goulburn that its revised bid represents a decline in implied value and contravenes the truth-in-takeovers provision.

The claims centre on WCB's withdrawal of plans to pay two fully franked dividends under Saputo's revised offer.

Murray Goulburn, which owns 17.7 per cent of WCB, kicked off its regulatory approval process through the ACT in Melbourne on Monday. Tribunal president John Mansfield indicated Murray Goulburn could get merger approval by February 28, putting the timetable closer to three months rather the six-month maximum.

Justice Mansfield also echoed calls that an auction for WCB would be the best outcome for shareholders, saying: "The more bids the better."

The WCB board has recommended Saputo's bid to shareholders despite Murray Goulburn's offer of $9.50 a share in cash being higher, albeit more conditional.

WCB said last week it wanted to be an active participant in the tribunal process - where competition concerns are weighed against public benefits - and Justice Mansfield said on Monday that WCB's role would be unrestricted.

Interested parties are due to make submissions to the tribunal by December 18. A full hearing is scheduled to begin on February 10 and will last about five days.