Fonterra extends its Natfoods bid for third time

Dairy giant Fonterra has extended - for the third time - its takeover offer for Australia's National Foods to March 29.

It announced the new date in a message to the New Zealand Stock Exchange.

The Fonterra offer had been due to expire on March 8 and Fonterra had to inform the market by yesterday whether it would further extend or increase the offer.

Under Australian rules, Fonterra, which already owns 20 per cent of National Foods, will now have until March 22 to say whether it will raise its bid of A$5.45 ($5.99) a share, or seek a further extension.

So far, its offer has been trumped by a bid of A$6 ($6.59) a share from Philippines food and beverage group San Miguel, whose offer is due to close on March 18.

National Foods has valued itself at between A$6.11 and A$6.65 a share, and its board has backed San Miguel's offer.

Analysts believe Fonterra will have to offer at least A$6.17 a share but are split over whether it can afford to pay more than San Miguel, which is seen as having deep pockets.

Fonterra, which makes Mainland cheese and Anchor butter, wants a bigger slice of the A$11 billion dairy market in Australia, where it claims about 14 per cent of dairy sales.

National Foods said last week the takeover battle being fought over it had turned into a marathon: "We didn't expect this would be going for four months."

- NZPA