The bidding war for Unigate's dairy and cheese business has intensified with Robert Wiseman Dairies' making a formal offer worth £225m.

But rival Dairy Crest, whose February offer is now worth about £205m, is "considering its position" and has urged Unigate shareholders to take no action.

The move, by East Kilbride-based Wiseman, comes a day after the Department of Trade and Industry decided not to refer its bid to the Competition Commission.

The company said its proposals would give £125m directly to Unigate shareholders, equal to about 54p per share.

Chairman, Alan Wiseman, said: "Our offer not only values the Unigate Dairy business at significantly more than the Dairy Crest merger proposal, but also offers the certainty of a full cash payment."

Dairy Crest's offer, which includes the issue of 75.7 million shares and assumption of £100m in debt from Unigate, had initially been worth about £220m in February when its shares were worth 158p.

Shares movement

Dairy Crest shares added half a penny to139p on Thursday morning, while Unigate shares were unchanged at 295p.

Robert Wiseman shares have been temporarily suspended since it emerged last month it would make a bid.

In February, Unigate announced the deal to sell its liquid milk and cheese arm to Dairy Crest in a long-awaited consolidation of an industry hampered by overcapacity.

The merger had been expected to give Dairy Crest, whose brands include Clover, Frijj and joint venture partner Yoplait, first or second position in every dairy sector and double its size to a turnover of about £1.6bn.

The Wiseman bid came as a shock to analysts since the Scottish supermarket milk supplier was bidding for a business three times its size, geographically distant and one that would take it into largely new areas, such as cheese production.