Australian dairy processor Bega Cheese, which kicked off the takeover battle for local peer Warrnambool Cheese and Butter Factory, is to walk away from the table and close its offer.

In a statement to the Australian Stock Exchange, Bega Cheese said it would not extend its cash-and-shares bid for WCB when it expires at 7pm Melbourne time tomorrow (20 December).

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That would leave Canadian dairy group Saputo and Australian co-op Murray Goulburn to fight it out for WCB. Both companies have cash offers on the table higher than Bega Cheese’s bid.

Bega Cheese’s mix of cash and stock was only accepted by a handful of WCB shareholders, which took its existing stake in the business to just over 18%.

“Bega Cheese is pleased its takeover offer for WCB has facilitated the competitive takeover process and created significant value for WCB shareholders,” the company said. “Once its offer is closed, Bega Cheese will consider its options regarding its strategic shareholding in WCB.”

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The two remaining bidders also hold similar stakes in WCB. Murray Goulburn owns around 17% of the company. Saputo has acceptances from WCB investors worth around 17% of the business. Meanwhile, Kirin Holdings, the Japanese food and drinks group, owns 9.99% of WCB, a stake it bought as the battle for the processor intensified.

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At present, Saputo has the highest offer on the table. On Tuesday, Saputo increased its bid after an intervention from Australia’s Takeovers Panel.

Saputo revised its offer after the takeover watchdog accepted a complaint from Murray Goulburn.

Saputo, which had said it would offer A$9.20 a share to WCB investors if it received the backing of over half the company’s shareholders, is now offering A$9.40 a share if it wins the support of 75% of stockholders. It will up the bid to A$9.60 a share if it over 90% of investors back the bid.

Murray Goulburn’s latest bid values WCB at A$9.50 a share. However, the bid is dependent on approval from Australian competition officials. The Australian Competition Tribunal is scheduled to rule on the offer in February.