Quebec-based Saputo's bid to acquire a leading Australian dairy processor is facing a new challenge from its chief rival, which claims investors were misinformed about the true value of Canadian cheese company's latest offer.

Murray Goulburn Co-operative has asked the Australian Takeovers Panel to intervene to force Montreal-based Saputo to drop its latest revised bid for Warrnambool Cheese and Butter Factory.

Australia's largest dairy processor says that Warrnambool's shares traded for a period this month based on "misinformation as to the terms of the Saputo bid" because of Warrnambool's decision Monday to no longer pay a dividend of $1.31 Australian per share. That means shareholders can't access 56 cents per share in "franking" or tax credits from Saputo's earlier offer.

"Murray Goulburn believes that the amended terms represent a reduction in the implied value of Saputo's offer to certain WCB shareholders," it said in a separate news release.

Saputo announced on Monday that it would pay $9.20 Australian dollars per share if receives more than half of Warrnambool's shares — or $9 per share if it doesn't get a majority.

Seeks to block bid

Murray Goulburn — which has its own takeover aspirations for Warrnambool — said it wants the Australian regulator to prevent Saputo from processing or acquiring Warrnambool shares and for special dividends to be reinstated by Warrnambool.

Warrnambool's shares closed at $9.25 in Wednesday trading on the Australian Stock Exchange, up from $4.51 prior to Bega Cheese's initial bid Sept. 12 that prompted a three-way bidding war with Saputo and Murray Goulburn.

The takeover panel — a peer review body that regulates Australian corporate control transactions — said it hasn't decided whether to conduct proceedings and declined to comment on the merits of Murray Goulburn's application.

Warrnambool, which is supporting Saputo's bid unless it receives a superior offer, said it disagrees with Murray Goulburn's application but wouldn't comment further until panel proceedings.

Bega Cheese may enter legal fight

Reports in Australia said Bega Cheese agrees with Murray Goulburn's application and will decide whether to join the effort or launch it own challenge. Bega and Murray Goulburn each own about 18 per cent of WCB shares. Lion, which is owned by Japanese food conglomerate Kirin, controls 10 per cent.

Murray Goulburn said its $9 per share offer represents "compelling value" and ensures Warrnambool will remain Australian owned and operated. However, it can't make its bid unconditional because it needs regulatory approval from Australia's competition commission, a process that could take up to six months. A takeover of Warrnambool would allow Murray Goulburn to control more than 40 per cent of Australia's dairy market.

Saputo didn't immediately respond to requests for comment.

Its bid requires the formal approval from the foreign review board, but Australia's treasurer has said it wouldn't block Saputo's takeover bid from being decided by WCB shareholders.