By LIAM DANN
Australian rural services company Elders has approached Fonterra target Bonlac but will not say what its intentions are.
Fonterra owns 25 per cent of Bonlac - Australia's fourth largest dairy company - and last month proposed a deal that would increase that to 50 per cent.
Representatives of Elders
- owned by ASX listed food and beverage group Futuris Corp - met Bonlac executives yesterday.
In a statement to the ASX Bonlac said it agreed to meet representatives from Elders after they "indicated an interest in exploring a proposal".
This sparked speculation that Fonterra might be facing a rival bidder for Bonlac.
A spokesman for Futuris Corp downplayed the significance of the meeting. "It was just a preliminary meeting to explore areas of mutual interest," he said.
Just because it was announced to the stock exchange did not mean any major announcement was imminent, he said.
"We're not at the first date stage. We haven't even bought a drink yet."
A Fonterra spokeswoman said the company was continuing its negotiations with Bonlac.
Fonterra was aware that members of the Bonlac board were meeting Elders and would await the outcome of the meeting.
It is understood that chairman Henry van der Heyden is closely involved in Fonterra's plans to lift its stake in Bonlac.
He was overseas and unavailable for comment yesterday.
The deal would see Bonlac cancel special dividend payments to Fonterra in return for issuing new shares to give Fonterra an equal partnership.
It depends on 75 per cent approval of Bonlac shareholders.
When it was announced last month it received support from Bonlac chief executive Peter Myers.
