Bega Cheese is considering whether it will join legal efforts to stall Canadian firm Saputo's takeover offer for Warrnambool Cheese and Butter.
Dairy cooperative Murray Goulburn on Wednesday sought to stop Saputo acquiring shares in Warrnambool, via a Takeovers Panel application alleging a recent change in the Saputo offer means some Warrnambool shareholders were misinformed.
In an escalation of the three-way bidding war that began in September, Murray Goulburn sought interim orders from the panel to stop Saputo processing acceptances of its offer, and from acquiring Warrnambool shares on-market.
Murray Goulburn also wants to have Warrnambool ordered to reinstate special dividends and have Saputo blocked from varying the conditions of its bid.
Bega Cheese is expected to announce by Thursday whether it will join Murray Goulburn's application or launch its own application to the panel.
Bega Cheese adviser David Williams said Bega supported Murray Goulburn's actions and that Bega considered the latest changes to Saputo's offer to be a "substantial reduction" in value.
"We are considering our position," Mr Williams told AAP.
Saputo is leading the bidding war for Warrnambool with a $9.20-a-share offer that has the support of the Warrnambool board.
Saputo lifted its offer from $9 a share on November 25 and in the process Warrnambool scrapped conditions that would have paid accepting shareholders special dividends of 46 cents and 85 cents a share.
Franking credits worth 56 cents a share were associated with the dividends, valuing the deal at a maximum $9.56.
In a statement, the Takeovers Panel said Murray Goulburn had submitted that removing the special dividends meant Saputo's bid would not conform with previous announcements, contrary to truth in takeovers policy.
Murray Goulburn also alleged that shares traded before November 25 were traded "on the basis of misinformation" that franking credits would be available.
Bega Cheese and Murray Goulburn are both major shareholders in Warrnambool, holding 18 per cent and 17 per cent respectively.
While both are still bidding for Warrnambool, a variation in the Saputo offer affects the value they stand to receive as shareholders.
Bega has made a final offer of 1.5 Bega shares and $2 cash, worth $8.975 on current pricing, while Murray Goulburn has offered $9 a share.
The Takeovers Panel said no decision had been made on whether to conduct proceedings over Murray Goulburn's complaint.
In a statement, Warrnambool Cheese and Butter said it disagreed with the basis of Murray Goulburn's complaint and would respond in accordance with panel procedures.
Saputo also announced it has built its stake in Warrnambool to 4.799 per cent.
Warrnambool shares dropped one cent to $9.25 while Bega shares were unchanged at $4.65.
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