Commonwealth Securities has joined a growing list of Australian brokers picking that Fonterra will win the battle for National Foods.
But, unlike other industry analysts, Commsec is picking a protracted bidding war that could see Fonterra paying up to A$7 a share.
That would value National Foods at almost $2.25billion.
In a research report, Commsec argues Fonterra can theoretically afford to pay A$7.50 a share. But it says a price of A$7 will be enough to see off rival bidder San Miguel.
Other brokers, such as Austock, have picked that San Miguel will have little interest in a bidding war and will back down if Fonterra trumps its bid of A$6 a share.
Commsec says Fonterra has a strategic advantage over the Filipino brewer because of the extra synergies it can extract from merging National Foods with its existing Australian operations.
Even at A$7.50, National Foods would boost Fonterra's earnings per share by 0.3 per cent, the report says.
At A$6.25 a share - the kind of price other analysts are picking will be enough to win the bidding war - National Foods would add 13.2 per cent to Fonterra's earnings per share.
Fonterra would have to weigh those benefits against the extra debt burden it would be servicing after the purchase.
The Commsec report notes that Fonterra is at a funding disadvantage compared with San Miguel.
"Fonterra has a high level of debt while San Miguel has spare cash to fund part of the acquisition."
Fonterra's original offer price of A$5.45 would push its gearing to 55 per cent, beyond a self-imposed comfort level of 40 to 50 per cent.
That means every extra cent Fonterra is forced to pay for National Foods will put more pressure on the entire organisation to boost earnings in order to service debt without impacting on farmer payouts.
Fonterra must make the next move in the takeover battle.
The deadline for its offer is February 1. Australian Stock Exchange rules require that any change to the offer be made seven days before the close.
It is possible that next week Fonterra will choose to extend the closing date and await San Miguel's formal bidder's statement before responding with an increased bid.
