MONTREAL - Saputo has become the largest shareholder of Australia's oldest dairy processor, increasing its stake in Warrnambool Butter & Cheese to 20.1 per cent ahead of an expected extension of Friday's deadline for its more than AU$500 million takeover bid.

The Montreal-based dairy controls 11.27 million shares, up from 10 million or 17.9 per cent as of Dec. 24. Several Warrnambool directors are among the shareholders who have tendered their investments.

Saputo (TSX:SAP) has surpassed Bega Cheese, which controls 18.8 per cent of WCB, followed by rival bidder Murray Goulburn's 17.7 per cent, and Lion's 9.9 per cent.

The company denied Australian reports that it has extended the deadline by two weeks.

"You can be sure that if there was such an announcement, we would make it available on the Australian Stock Exchange and on (the) TSX," spokeswoman Sandy Vassiadis wrote in an email.

An Australian newspaper, which reported a two-week extension Thursday, said Saputo runs the risk of angering the Takeovers Panel for a second time by waiting until the last minute to extend its offer.

Saputo increased its bid in mid-December after the regulator criticized a decision by Saputo and Warrnambool to remove a special dividend in an earlier bid, which it said created "confusion and disruption" to the market for Warrnambool shares.

The Canadian company is currently offering AU$9 per share if it doesn't get a majority of WCB's stock but it would pay more if it gets more than 50 per cent of outstanding shares.

Saputo will pay AU$9.20 per Warrnambool share if it gets a simple majority, AU$9.40 per share if it gets 75 per cent of the total and AU$9.60 per share if it gets at least 90 per cent of WCB's stock.

Murray Goulburn has offered AU$9.50 per share, conditional on it securing a majority of WCB shares and winning support from the Australian Competition Tribunal. The tribunal is holding hearings on the issue in February.

The Australian Competition and Consumer Commission, which is assisting the tribunal, has reiterated its concerns about Murray Goulburn's submission.

''The ACCC considers that a there is potential for the proposed acquisition to have the effect of lessening competition in the acquisition of raw milk,'' the commission said in a 76-page report, which had parts blacked out.

The agency made similar comments when Murray Goulburn tried to acquire Warrnambool in 2010.

On the Toronto Stock Exchange, Saputo's shares were up eight cents at C$48.99 Thursday afternoon.

News from © The Canadian Press, 2014