Warrnambool Cheese and Butter Factory (WCB), the Australian dairy firm at the centre of takeover speculation, could be a target for Canadian dairy giant Saputo, one leading Canadian analyst claimed today (9 December).

WCB revealed yesterday that it had received an "unsolicited and indicative" approach for the business, which it dismissed as under-valuing the company.

Reports in Australia have claimed that National Foods or milk processor Murray Goulburn could be behind the approach for WCB.

However, Michael van Aelst, an analyst at TD Newcrest, supported suggestions that Saputo could be the mystery bidder.

"An acquisition in Australia is one of Saputo's strategic priorities as it could provide a second, more stable and larger source of low-cost raw milk to make value-added dairy products for the international markets," van Aelst wrote.

The analyst said that an acquisition of one of Australia's six largest dairy processors is vital for Saputo to gain sufficient scale in the country.

"With the top three players - Murray Goldburn, Fonterra and Kirin (National Foods) - unlikely to sell and Parmalat most recently acting more like a consolidator in Australia, Warrnambool could be a very likely target for Saputo," he added.