Liam Dann: Why Fonterra is taking time over dairy bid

It almost looks as though Fonterra's takeover strategy is to bore its opponents into submission.

When the dairy company extended its National Foods takeover bid on Monday - for the third time - you could almost hear the groans from the corporate towers in Sydney and Melbourne.

Fonterra's original bid of A$5.45 a share - made last October - has been dead in the water since Philippines brewer San Miguel offered A$6 in December.

National Foods has opened its books and Fonterra has had almost a month to crunch the numbers.

Even its normally sceptical farmer shareholders seem to have given it the green light for at least one more crack at the jewel of the Australian dairy industry.

And Fonterra management has made no secret of the importance of National Foods to its long-term expansion strategy.

So why wait?

Fonterra management, as usual, is saying nothing.

But it seems a couple of issues may have slowed the process.

It is understood that negotiations over the distribution rights to Yoplait brand products have been a sticking point.

National Foods has the licence to distribute the popular yoghurt brand in New Zealand and Australia.

It is a licence that adds a great deal of value to the company but it is also one which the French multi-national has the right to renegotiate in the event of an ownership change.

Fonterra needs to have the deal secured to be sure its numbers add up.

It is likely that Yoplait, having recognised the strategic value of the licence, invited Fonterra to do some hard talking about a new price.

Sources close to the deal say the issue has largely been resolved but it hindered Fonterra's due diligence exercise.

The other contentious issue remains the relationship between Fonterra and the National Foods board.

It became openly hostile in November as National Foods rejected Fonterra's bid as "opportunist".

There has been some fence-mending since then and Fonterra now expects National Foods to endorse its bid - if and when it trumps San Miguel.

But National Foods boss Peter Margin is understood to remain heavily in favour of San Miguel.

That's not surprising given that the Filipinos have said they plan to leave National Foods' operations largely untouched.

Meanwhile, the more Fonterra pays the more it will have to slash and burn to cut costs when it does get control.

So the talking goes on.

But despite the tedium, Fonterra can afford to take its time.

Sources in both camps accept there is no chance of the San Miguel bid succeeding while Fonterra stays in the game.

And Fonterra is most certainly still in the game.