In an announcement to the Australian Stock Exchange today, the Board of Warrnambool Cheese and Butter Factory Company Holdings Limited (WCB) advised that it has received a proposal from a third party that has expressed an interest in the possible acquisition of WCB.

After taking advice from professional advisers, the Board has informed the third party that the indicative proposal does not incorporate appropriate value to reflect the prospects of the company. Accordingly the Board of WCB has recommended to shareholders take no action at this point in time.

The Board says that the prospects for WCB have improved significantly in the past six months. The company has recovered all of the milk supply volume lost in early 2009 and the Allansford plant is currently operating close to full capacity. Dairy business conditions have also improved markedly, with global dairy prices recovering more than 50% in Australian dollar terms since August 2009.

In addition, WCB continues to pursue significant growth and investment opportunities, including Great Ocean Ingredients (which has now been commissioned and is operating profitably) and Sungold retail milk (which continues to grow profitable market share).