Bega Cheese executive chairman Barry Irvin has insisted the group is “strongly in the game” as it battles for control of Warrnambool Cheese and Butter Factory (WCB), prompting speculation Bega could be preparing to sweeten its A$437m (US$414.9m) bid for the dairy group.

Bega is locked in a three-way battle for WCB, with competing – and higher – bids from Canada’s Saputo and Australian food major Murray Goulburn. However, speaking yesterday (3 November) on the Financial Review, Irvin insisted Bega was firmly in the running.

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“We are the only offer that has now dealt with all its external conditions and we can think about strategy around our bid without having to worry about waiting for approvals,” he said.

Last week, the Australian Competition and Consumer Commission said it would not oppose Bega’s proposed merger with WCB.

Bega’s offer currently stands at $2 cash and 1.2 Bega shares. At the current share price, the offer values WBC at a total of around $7.27.

Bega already owns 18% of WCB. However, it is facing competition from higher bids: Saputo secured the backing of the WCB board with its offer of $8 a share in cash, while Australia’s largest dairy exporter Murray Goulburn has offered $7.50 in cash. Murray Goulburn holds a 17.7% stake in WCB currently.

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Speaking on the Financial Review, Irvin said that Bega reserved the right to adjust its bid as appropriate.

According to Freshagenda analyst Joanne Bills, the company is likely working on a counter-offer as the current bid is “well off the pace”.

“Bega were waiting the Australian Competition and Consumer Commission (ACCC) to come back with their ruling on the takeover bid,” Bills told just-food. “We believe they are working on a counter-offer… they have some work to do to remain in the hunt. Their issue of course is that the offer is a mixture of cash and shares which represents some risk for WCB shareholders. Especially those that don’t have a long term view of the industry – Australian ownership etc – and just want to cash in.”

However, Bills also emphasised that a significant proportion of WBC’s shareholders do take a long-term view of the transaction. “A large part of the shareholding remains with either current or ex-suppliers. At least at 30 June we estimate farmers and staff represented 14 of the top 20 shareholders, and 25% of that group’s shareholdings. For some it may be about the money but for others it will also be about winning the hearts and minds of the true believers that want a positive long term outcome for the business.”