Brand chase takes a twist but Philippine company may still want Australian prize Philippine food and drink conglomerate San Miguel Corp yesterday said it was 'studying a bid' for New Zealand Dairy Foods, but it remains unclear whether this means it will abandon its bid for bigger Australian target National Foods. San Miguel has been locked in a six-month battle for National Foods with Fonterra, and most analysts believe that the New Zealand company's A$1.84 billion ($11.35 billion) offer is likely to succeed. Yesterday, San Miguel revealed it was in 'preliminary studies' on buying Dairy Foods, which could be worth as much as A$650 million. New Zealand media reports claim that millionaire entrepreneur Graeme Hart, who controls Dairy Foods, is sounding out potential buyers for the business, which he bought from Fonterra in June 2002 for about A$300 million. Dairy Foods is a diversified food producer with brands such as Anchor - which produces products from packet jelly to canned fruit, and other labels such as Fresh n Fruity and Fernleaf. It posted a profit for the six months to December last year of NZ$37 million ($214.18 million), on sales of NZ$257 million. San Miguel's admission of an interest in Dairy Foods is the latest twist in the bidding saga over National Foods, with Fonterra - which holds about 19 per cent of the company - recently trumping San Miguel with an offer of A$6.20 a share. Earlier this month, San Miguel complained to Australian regulators over the Fonterra bid, pointing to a deal for a merged Fonterra-National Foods to produce - under licence from private French firm Sodima - Yoplait yoghurt in Australasia. San Miguel said more details of this deal should have been disclosed. The complaint was interpreted as a sign that San Miguel was still interested in National Foods, and could be preparing a counter bid - even though the Philippine company's share price has been falling on fears of a bidding war. National Food shares are still travelling well above the higher Fonterra bid, at about A$6.35, in expectation the battle will continue. Hugh Giddy, a portfolio manager at Perennial Value Management, believed another bid from San Miguel was in the pipeline. If that occurred, Mr Giddy said he was expecting a counter-bid from Fonterra, at about A$6.50 - well within the A$6.10 to A$6.60 range of National Foods' own valuation. 'My guess is that Fonterra will win, because they can afford to pay more, and because the business is more strategic to their plans,' he said. 'Because Fonterra have existing operations in Australia, they will be able to extract more cost savings from any takeover. 'This is not necessarily reflected in the current share price, but Fonterra will be aware National Foods will be in a good position to participate in an upcoming consolidation of the Australian dairy sector.' Mr Giddy said that the likelihood that troubled Italian dairy giant Parmalat would be forced to sell its Pauls dairy business in Australia opens up the possibility the industry's main players would be reduced to two within two years - with National Foods and the soon-to-list Dairy Farmers dominating the industry. On top of the Yoplait scenario, National Foods becomes a tasty morsel for Fonterra, whose traditionally thrifty stakeholders - New Zealand dairy farmers - are enjoying a boom period. Mr Giddy said National Foods' good cash flow and low debt levels made it easier for any bidder to fund the acquisition - another factor which pointed towards a new round of bids. 'It all suggests to me that National Foods is cheap at the current bid levels, and that both parties could be ready to have another bite at the cherry.'