Saputo shares held firm in early trading after the dairy group's revised cash takeover offer for Australian Warrnambool Cheese and Butter Factory received a 'unanimous recommendation' from the Warrnambool board.
Shares in Canada-based Saputo were trading up 0.3% at Can$51.50 in early deals in Toronto as investors got their first chance to respond to the Aus$449m ($432m) deal for Australia's oldest dairy processor, revised higher from Aus$392.7m ($370m).
The deal will still require approval by Australia's Foreign Investment Review Board, but will not face the same hurdles as those of other domestic suitors, who require approval of the Australian Competition and Consumer Commission.
'This is our dream'
Approval by Warrnambool shareholders would fulfils a long-held desire by Saputo to set up operations in Oceania, to exploit the region's status as a major exporter to the booming dairy markets in Asia, and in particular China.
"This is our dream of ultimately having an Australian platform," Lino Saputo, the group's chief executive, said previously.
"We believe Australia has the ideal platform for us getting products into those emerging markets."
Importance of Oceania.
Saputo was in 2008 beaten to Australia-based Dairy Farmers by Kirin Holdings, in a takeover battle in which Victoria-based giant Murray Goulburn was also an underbidder.
And the group has remained vocal in its ambitions for a deal in the region, saying in its annual report that "we recognise the importance of developing new markets within the global dairy industry, specifically in Latin America and Oceania".
The strategy of using Australia as an entre to Asia has also been followed in grains by a series of foreign acquirers, with US-based Archer Daniels Midland buying Graincorp and Canada's Viterra purchasing ABB Grain, before itself being bought by Glencore.
Meanwhile, China Investment Corporation., the Chinese wealth fund, is believed to be considering a joint Aus$190m bid, with New Zealand's Fonterra, for Tasmania-based dairy group Van Diemen's Land.
While Saputo will be keen for shareholder approval of its latest proposal other parties interest in Warrnambool are likely to further garner their own offers.
Murray Goulburn, which holds a 17% stake in Warrnambool, recently raised its own offer for the group to Aus$7.50 per share.
A statement released in response to the Saputo offer said Murray Goulburn remains committed to its offer for Warrnambool and that resolution of ownership "will be a long process".
Murray Goulburn has urged the FIRB to delay any decision on Saputo's offer until its own application to the Australian Competition Tribunal has been considered.
Bega Cheese, which owns an 18% of Warrnambool, is also in the running.
Warrnambool shares finished up 3.3% at an all-time closing high of Aus$8.42 in Sydney, where Bega Cheese stock closed up 1.3% at Aus$4.00.