An independent analysis has concluded that Bega Cheese’s takeover bid for Warrnambool Cheese and Butter is not fair or reasonable, but also shows rival bidder Saputo’s offer is at the bottom of the value range.

Warrnambool (WCB) commissioned KPMG Corporate Finance to examine Bega’s September 12 offer.

In a report released on Monday, KPMG concluded the offer of $2 cash and 1.2 Bega shares for each Warrnambool share is “neither fair nor reasonable to WCB shareholders”, citing the potential for WCB to improve on its recent performance because of export market recovery and a lower Australian dollar.

The KPMG report assessed the Bega offer as being worth between $5.77 and $6.08 a share, but found WCB shares were valued at $6.96 to $7.49. That put the offer 17.1 per cent to 18.9 per cent below the assessed WCB share value.

WCB chief executive David Lord has maintained Warrnambool’s rejection of Bega’s offer and its recommendation of Canadian dairy giant Saputo’s bid of $7 a share.

“The WCB board believes the independent expert’s findings validates its view that Bega’s offer is highly opportunistic as it was made before the full benefit of improved international market conditions and strategic initiatives,” Mr Lord said in a press release issued with the KPMG report.

“In contrast, Saputo’s $7.00 all cash offer is within the value range for WCB shares assessed by the independent expert and reaffirms the decision of the board to unanimously recommend Saputo’s offer, in the absence of a superior proposal.”

KPMG’s report does not include an assessment of Saputo’s offer, which was launched on October 8.

WCB shares dropped four cents to $7.23 while Bega shares gained one cent to $3.83.