A move by New Zealand dairy giant Fonterra last week to email industry players widely publicising its appointment of the former head of equity capital markets at Goldman Sachs, Mike Everett, as its adviser has left some puzzled.
"It is very strange," a source said yesterday.
Fonterra would not comment yesterday.
It is understood that Mr Everett, of Reunion Capital Partners, was advising Fonterra on its options throughout Australia, including WCB, and what it was and was not able to do.
Bega and Fonterra have a deep relationship, where Fonterra has a licence to sell the cheese that Bega makes.
Sources played down the likelihood that Fonterra would launch a bid for Bega yesterday, and said it would be hard to see what its next move could be in terms of WCB, with the pricing of the company now "a bit frothy".
Meanwhile, Lion moved swiftly to quash suggestions its dairy operations were up for sale after sources said interest out of China had recently been in Australia "kicking the tyres" on assets, in what is the latest twist in the battle for Warrnambool Cheese & Butter.
Lion waded into the battle for the takeover target this week, sending shares soaring with the purchase of a 9.99 per cent stake worth $50 million.
There has been speculation that Lion could sell its dairy operations, which sits within its drinks and dairy arm that accounts for half of about $5bn in overall annual revenue for the group owned by Japan's Kirin Holdings.
"Lion has not held any such discussions about selling its milk business," a company spokesman said yesterday.
While some sources questioned why Lion would buy a stake in WCB if it was placing its dairy business on the block, sources within the industry say the blocking stake could be to secure its supply arrangements before it was offloaded.
Lion, which outlaid $3.9bn buying dairy processor National Foods in 2007 and NSW co-operative Dairy Farmers in 2008, has struggled to wring an acceptable return from its dairy assets and has rationalised plants throughout the country.
A deal could unfold where Lion sells its 10 per cent stake in WCB to Saputo in exchange for a lucrative supply contract from the Canadian company should it succeed in the takeover battle.
There has been speculation that Fonterra and Saputo were the logical buyers of Lion's dairy business if it was to become available.