Federal government applies brakes to Saputo's local ambitions

Saputo's mission to woo Warrnambool Cheese and Butter (WCB) shareholders has suffered a setback with the Takeovers Panel blocking its bid for at least two months.

The Canadian company is not allowed to buy any further WCB shares according to the federal government panel. The move follows a complaint to the panel by rival bidder, Murray Goulburn (MG), over Saputo's latest $9.20 offer, which it said contravened regulations.

As of late last week, Saputo had acquired 9.6 percent of Warrnambool Cheese and Butter shares on the back of the bid.

Murray Goulburn's offer of $9.50 cash per share is currently the highest, ahead of the third bidder, Bega Cheese, which is is offering 1.5 of its shares and $2 cash for each WCB share.

A successful WCB takeover by Saputo would mark its entrance into Australia. MG, on the other hand, is appealing to WCB shareholders to keep the company in Australian hands.