Bega bid declared neither fair nor reasonable by independent expert

The Bega Cheese takeover offer for Warrnambool Cheese & Butter (WCB) is not fair or reasonable according to an independent review by KPMG Corporate Finance.

The KPMG analysis, which was commissioned by WCB, found that the Bega offer was valued at between $5.77 and $6.08 a share, even though WCB shares were valued at $6.96 to $7.49.

According to WCB, the independent expert concluded that Bega's offer was neither fair nor reasonable and that the offer consideration was between 17.1 per cent to 18.9 per cent lower than its assessed valuation range for WCB shares.

"WCB believes the Independent Expert's Report confirms the board's view that the Bega offer is highly opportunistic and does not reflect he expected positive impact on earnings from recent business initiatives and improved market conditions," the company said.

KPMG's report does not include an assessment of  the bid by Canadian dairy giant Saputo, but the offer is within KPMG's value range for WCB shares, and WCB said it continued to recommend the offer in the absence of a superior proposal.