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Bega has sent a request for proposal to accounting firms in recent weeks to help it run financial due diligence on Lion Dairy & Drinks. supplied

That’s Bega Cheese’s message to drinks giant Kirin – and its pitch to get exclusive talks to buy the Japanese company’s up for sale Australian white milk, milk-based beverages, yoghurt and juice business.

It is understood Bega has made its intentions to buy the $500 million-odd portfolio well known to Kirin and Lion’s local management, and is doing everything in its power to see the business sold via a round of quick and hassle-free bilateral talks.

Bega knows there is an auction coming – and it is understood it has gone as far as to send a request for proposal to accounting firms in recent weeks to help it run financial due diligence – and would like a first look, if at all possible. Sources said there were no live talks at this stage.

And Bega’s push has not fallen on deaf ears. Kirin and Lion know that the company has the financial power and stomach to swallow the portfolio, and shares something of a darling status in Canberra, where its most recent attempt to sell Lion Dairy & Drinks fell over. It also knows how interested Bega was previously, and the time it spent getting to understand the up-for-sale business.

The big question, as ever, is about price. Bega’s has shareholder support to bid and bid strongly, but is there a higher offer out there? That’s something Kirin and its bankers are trying to work out. Running an auction is the safer bet, but could delay Kirin’s exit.

Of course Bega has been the strong Australian alternative to buy Lion Dairy & Drinks for weeks – ever since Treasurer Josh Frydenberg blocked an earlier deal with China Mengniu Dairy Co, as revealed by The Australian Financial Review.

Bega has recalled its house advisers – Melbourne boutique Kidder Williams, law firm Addisons and is now looking for an accounting firm – and is jockeying for position.

It would be a chunky acquisition for the $1.16 billion Bega, which was sitting on $236 million net debt as at June 30. However, it has some big name investors on its share register, including Perpetual, Vinva and Ethical Partners Funds Management, who would be expected to follow their money into an equity raising for a well priced and on-strategy acquisition.

Bega all but confirmed its intentions to bid for the Lion portfolio last month, when fronting analysts on its annual financial results call.

Highway closures force Okanagan dairy farmers to dump milk as it can’t get to Coast for processing.

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