The battle for Warrnambool Cheese and Butter is far from over despite the dairy group's board backing a revised unconditional $9-a-share cash offer from Canadian company Saputo late on Friday.
Local rivals, Murray Goulburn and Bega Cheese, refused to admit defeat over the weekend, raising the possibility of a bid price above $10.
The three-way battle for Warrnambool appeared to reach a decisive juncture late Friday evening when Saputo sweetened its offer again to Warrnambool shareholders, making its offer unconditional.
"Our revised $9 cash offer underscores Saputo's commitment to Australia and the Warrnambool business. Saputo will invest to grow local industry and provide the opportunity for farmers to grow their businesses," said Lino Saputo jnr, the chief executive and vice-chairman of the board of Saputo.
The board of Warrnambool swiftly endorsed the all-cash offer and recommended shareholders to accept it in the absence of a better offer.
The chairman of Warrnambool, Terry Richardson, said Saputo's offer provided more "execution certainty" than the highly conditional offer from Murray Goulburn as well as the part-scrip and part-cash offer from Bega cheese.
But Bega countered that its combined scrip and cash offer of $9.13 a share was superior to Saputo's $9 cash offer based on the closing price of Bega's share on Friday.
The company was confident more Warrnambool shareholders would accept its offer.
David Williams, Bega's takeover adviser, said the bidding war for Warrnambool was not over yet for its client. "Bega considers itself to be very much still in the game," he said. This was despite Bega making its offer final.
"Under Corporations Law, we will not increase it. We shot our last shot and that is our final bid, which is set to close on 28th of November," Mr Williams said.
The managing director of Murray Goulburn, Gary Helou, told the ABC's Inside Business in an interview recorded on Friday night, that the conditional $9 per share offer might not be the company's final bid, raising the prospect of an increased offer.
"We've said we have a good price offer," Mr Helou said. "We always reserve the right to review and react to obviously an ever-changing dynamic."
Murray Goulburn's offer is conditional on getting clearance from the Australian Competition Tribunal or no objection from the Australian Competition and Consumer Commission as well as receiving more than 50 per cent shareholder support at the close of the offer.
The bidding frenzy for the once-obscure Victorian dairy producer is in part driven by the anticipated demand for fresh and premium-quality Australian produce from a rising Asian middle class.
"If people talk to you at a helicopter view, they say the big driver for dairy prices in Australia and commodity price for that matter is demand that is coming out of Asia," said Mr Williams, of Kidder Williams, a corporate advisory firm.