Japanese dairy and beverage company Lion has entered the takeover battle for Warrnambool Cheese and Butter Factory, taking a 9.99 per cent stake in the company.
Warrnambool's share price surged on Tuesday, and Lion confirmed late in the day it was behind the move, buying up a significant stake in the company at prices well above the listed value.
"Lion has enjoyed a close relationship with WCB over many years and WCB plays an important role in Lion's cheese business," Lion said in a statement.
"Lion considers this stake a continuation and strengthening of this relationship."
Warrnambool shares rose by as much as eight per cent on Tuesday, before closing 44 cents higher, up 5.3 per cent, at $8.80.
More than six million shares changed hands.
Warrnambool said earlier in the day its shares had been traded at prices of around $9.25 per share.
Lion is owned by Japanese conglomerate Kirin, and owns well known dairy brands including PURA, Dairy Farmers, COON and Yoplait.
It has increased its stake in Warrnambool as three other industry players battle it out for control of the company.
Bega Cheese, Murray Goulburn dairy co-operative and Canadian dairy giant Saputo have all made offers.
Saputo leads the bidding, having raised its offer last week to $8.00 per Warrnambool share, valuing the target at $449 million.
Warrnambool's board has recommended its shareholders accept the revised Saputo bid in the absence of a superior proposal.
