UPDATE 1-Kirin unit interested in Dairy Farmers-source

(Adds details, background)

By Victoria Thieberger

MELBOURNE, March 4 (Reuters) - Australian dairy and juice producer National Foods, owned by top Japanese brewer Kirin Holdings (2503.T: Quote, Profile, Research, Stock Buzz), is interested in making a bid for milk and cheese producer Dairy Farmers, a source said on Tuesday.

Dairy Farmers put itself up for sale last month and said it has had substantial interest in a deal that could be worth up to A$1.0 billion ($940 million).

National Foods, bought by Kirin last November for A$2.8 billion, is one of Australia's largest food groups with brands including Pura milk, Big M flavoured milk and Yoplait yoghurt.

"Whether National Foods could pull enough synergies out to justify a premium price would be an issue," a source familiar with the situation told Reuters.

The firm previously made a bid for Dairy Farmers in 2000 for A$793 million that was rejected.

Other potential bidders include New Zealand unlisted dairy giant Fonterra, Italy's Parmalat (PLT.MI: Quote, Profile, Research, Stock Buzz), Australian food group Goodman Fielder (GFF.AX: Quote, Profile, Research, Stock Buzz) and Singapore's Olam International (OLAM.SI: Quote, Profile, Research, Stock Buzz), according to analysts.

National Foods is being advised by Macquarie Bank and Dairy Farmers has hired Goldman Sachs JB Were.