* Kirin unit Lion buys 9.99 pct stake in WCB
* WCB shares surge to record high before paring gains
* Lion, Bega, Murray Goulburn can block Saputo - analyst
(Recasts with Kirin buying stake, fresh comment)
By Thuy Ong
SYDNEY, Oct 29 Kirin Holdings Co Ltd
bought a 10 percent stake in Warrnambool Cheese and Butter
Factory Company Holdings Ltd (WCB) on Tuesday, in a
move that could block a takeover of the Australian dairy company
by Canada's Saputo Inc.
WCB has been the subject of a fierce bidding war, with
Saputo, Canada's largest dairy producer, last week raising its
bid to A$449 million ($430 million). That trumps separate
approaches from WCB's two largest shareholders, Bega Cheese Ltd
and Murray Goulburn Co-operative Co Ltd.
The purchase of the 9.99 percent stake by Kirin's Australian
food and beverage unit Lion threatens to derail Saputo's bid,
said Evan Lucas, a strategist at IG in Melbourne.
"It means that if they, Bega and Murray Goulburn banded
together, they'd now have just shy of 50 percent so they will be
able to block the bid from Saputo," he said.
Lion, which has brands including Berri juices and Pura milk
as well as XXXX, Steinlager and Toohey's beer, said it had
enjoyed a close relationship with WCB over many years and
considered the stake buy "a continuation and strengthening of
Australian dairy and farm assets are attracting increased
interest as companies ramp up their exposure to Asia's growing
appetite for milk, cheese and other food products.
Shares in WCB surged as much as 11 percent to a record high
in heavy trade on Tuesday, fuelling expectations of further
WCB shares hit a peak of A$9.30 and but gave up much of
their gains to close up 5.3 percent at A$8.80. Almost 6.2
million shares, more than 10 percent of the company, changed
hands on Tuesday.
WCB earlier noted the heavy trade in a statement to the
Australian Stock Exchange, but said it was not aware of the
reason for the unusual activity. It added that it was in
compliance with its disclosure obligations.
New Zealand dairy giant Fonterra Co-operative Group
, which had also been seen as a potential bidder, said
it had appointed Reunion Capital Partners to advise it on "the
current corporate activity in the dairy sector". But it declined
to comment on its possible involvement in a bid for WCB.
($1 = 1.0451 Australian dollars)
(Additional reporting by Lincoln Feast in SYDNEY and Naomi
Tajitsu in WELLINGTON; Editing by Ryan Woo)