Warrnambool Cheese and Butter says the timing of a takeover bid by Bega Cheese is opportunistic, and advised its shareholders to take no action for now.

The Warrnambool board is still reviewing Bega’s $319 million unsolicited offer, which if successful would create one of Australia’s largest publicly listed food companies.

In a letter to shareholders, Warrnambool said its business improvement measures, plus an expected improvement in global dairy markets and a weakening Australian dollar, provide a positive outlook for the company.

“Directors will assess these factors as we consider whether Bega’s offer adequately reflects the value of the WCB business today, the expected future earnings uplift from the initiatives currently underway and the improving market conditions,” chairman Terry Richardson said.

“Given the highly favourable outlook for WCB, we consider the timing of the offer to be highly opportunistic.”

The company’s shareholders have been advised to take no action in relation to the bid until the Warrnambool board issues a formal recommendation on the Bega offer.

Bega already holds an 18 per cent stake in Warrnambool.

Warrnambool shares were up three cents at $6.03 at 1432 AEST, while Bega shares were one cent higher at $3.46.