First Milk may take stake in Wiseman

THE milk merry-go-round took a new turn today after Scotland's Robert Wiseman Dairies said it was in talks that could lead to farmers' co-operative First Milk take a 15% stake in the group.

The deal would involve First Milk mounting a 250p-a-share tender offer for Wiseman shares, which tumbled in May after the group lost out to rival Arla in a key contract with Asda that provided about 15% of its sales. They were up 8p today at 235p.

Chairman Alan Wiseman said the link-up would not mean management changes but 'would strengthen the relationship that exists between the two organisations'.

First Milk, whose 4,000 farmers now provide 40% of the group's requirements, has been a key supplier for the past 10 years. The group has always carefully nurtured its reputation for giving farmers a fairer deal than its rivals.

However, it is thought that the move to cement links with First Milk is less about price and more about securing supplies ahead of forthcoming upheavals in the European Union's Common Agricultural Policy.