Japan’s Kirin Holdings has sought to dampen speculation that its Lion Dairy & Drinks business in Australia is to be sold to Bega Cheese.

However, Kirin has confirmed talks are taking place with the Australian food manufacturer.

Yesterday (23 November), it was reported Bega Cheese had agreed a deal to buy of Lion Dairy & Drinks with an announcement of the agreement said to be imminent.

Japan’s Nikkei newspaper said the transaction price to be paid by Bega Cheese is estimated at JPY40bn (US$385.3m). Yesterday, Bega Cheese secured a halt in the trading of its shares, pending, the Australian Securities Exchange announced, “pending it releasing an announcement regarding a capital raising”.

The ASX added: “Unless ASX decides otherwise, the securities will remain in trading halt until the earlier of the commencement of normal trading on Friday, 27 November 2020 or when the announcement is released to the market.”

In a statement today (24 November), Kirin said nothing has been decided.

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Noting the media reports of an imminent sale to Bega Cheese, it said: “Please note that this is not an announcement made by Kirin Holdings.”

It said since Kirin and Lion had determined a sale of the business was the best course of action, they had been “in negotiation with various candidates” over the sale.

It confirmed Bega Cheese is one of those “candidates” but said “nothing has been determined at this point”.

Reuters said today a source had told the news agency Bega was conducting due diligence on Lion Dairy & Drinks, although there was no guarantee of a deal.

Last week, The Australian Financial Review reported Bega, one of Australia’s major dairy suppliers and home to the Vegemite spreads brand, was vying with investment firm Tanarra Capital to acquire Lion Dairy & Drinks. The paper also said Saputo, the Canadian dairy giant, was no longer in the running for the business.

Kirin restarted efforts to offload Lion Dairy & Drinks in September after a move to sell the business to China Mengniu Dairy Co. hit the buffers a month earlier.

Kirin and Mengniu agreed to scrap a deal they had agreed for Lion & Dairy Drinks last November. The proposed transaction had been given the green light by Australia’s competition regulator in February. However, amid increasingly strained relations between China and Australia, Kirin said in late August approval from Australia’s Foreign Investment Review Board was “unlikely to be forthcoming at this time”.