The Australian dairy co-operative is rumoured to be considering a trade sale rather than proceeding with a planned $A1 billion ($NZ1.13b) initial public offering (IPO).

The official line from the Australian co-op is that an IPO will take place before June 2008, but the sheer weight of money looking for a home in the private-equity frenzy and the buoyant Australian sharemarket means an enticing window has opened up in the next six to nine months.

Dairy Farmers, which is owned by 2400 farmer shareholders, is a high-quality offering in a sector where rationalisation is gathering pace.

A dual-track process, in which the Dairy Farmers board and its advisers from Goldman Sachs J. B. Were would assess buyout offers against the likely proceeds from an IPO, is all but certain. And the posse of players with the balance-sheet strength to short-circuit a float with strong buyout offers is growing.

TheFonterra has stated its interest in Dairy Farmers on several occasions, although yesterday the New Zealand co-operative declined to comment on an offer.

TheCattleSite News Desk