Murray Goulburn is challenging Saputo's latest bid for Australian dairy Warrnambool Cheese and Butter Factory.

WCB is the subject of a three-way battle between Murray Goulburn, Saputo and another Australian processor Bega Cheese.

After a series of bids over the last two months, Murray Goulburn and Saputo have both tabled offers worth A$9-a-share. This week (25 November), Saputo said it would increase its bid to A$9.20 a share - should it attain more than 50% of WCB.

However, Murray Goulburn has lodged an application against Saputo's move with Australia's Takeovers Panel. Murray Goulburn has challenged Saputo's latest proposed bid, pointing to the withdrawal of plans to offer WCB's shareholders special dividends.

Saputo's A$9.20-a-share bid would no longer include WCB's plans to pay special dividends to its shareholders, a proposal set out earlier this month. WCB, which has backed Saputo throughout the takeover battle, had planned to pay out the dividends if the Canadian company reached certain thresholds of ownership. The dividends would be deducted from the A$9 a share offer. WCB said it no longer intended to pay the dividends.

A statement from the Takeovers Panel said Murray Goulburn has argued the withdrawal of the dividends means WCB shares traded between 15 and 25 November "on the basis of misinformation as to the terms of the Saputo bid, namely that Warrnambool shareholders would contingently receive franking credits of up to A$0.56 per share".

The statement added: "Murray Goulburn seeks interim orders, including that Saputo be restrained from processing acceptances and acquiring Warrnambool shares on market. Murray Goulburn seeks final orders, including that Warrnambool reinstates the previously proposed special dividends,1 Saputo be restrained from varying its bid to provide for the conditional payment of the additional $0.20 per share and further disclosure."

WCB has backed each of Saputo's bids, including the latest proposed offer outlined this week. The company's board reaffirmed its support for Saputo's bid and said each of its directors and executives planned to accept the offer in the absence of a "superior proposal".

The WCB board also "unanimously rejected" the Murray Goulburn and Bega Cheese bids. Murray Goulburn's offers have received criticism from WCB for needing regulatory approval.

Saputo's offer closes on 13 December. WCB's share roster includes its two rivals. Murray Goulburn and Bega Cheese each own around 18% of WCB. Japanese food and drink giant Kirin Holdings owns just under 10% of the business.