Talley's appears to be seeking greater control of Affco's dairy processing assets with its surprise buy-out of fellow shareholder Toocooya Nominees.
The Nelson-based food producer has increased its stake in the meat and dairy processing company Affco, from 53% to 76%, but Craigs Investment Partners broker Peter McIntyre said he believed it was a move to get greater access to Open Country Dairy (OCD), New Zealand's second-largest milk processor.
Affco is OCD's largest shareholder followed by Olam International and then Talley's.
Adding the Talley's and Affco stakes together would give it control of more than 50% of shares on issue.
Mr McIntyre said Talley's was obliged under takeover rules to make an offer to remaining shareholders, but he said the 37c a share offered to Spencer Family's Toocooya Nominees, may not be enough.
"I don't fancy their chances of a full takeover without any premium," he said.
Affco's independent directors have recommended shareholders not take any action until directors have had time to consider the proposal and shareholders are given independent advice.
The purchase price values Affco at $187 million, while Toocooya received $44 million for its stake.
Talley's is a family-owned business based in Motueka and processes seafood, vegetables and ice cream.
Through OCD, it has a stake in three dairy factories processing 800 million litres of milk a year.
Mr McIntyre said Talley's appeared to want to increase its presence in food processing.
