Overheard in Hong Kong on a day Victoria Harbour was a little whiffy: “Ugh,” said a Cantonese local to his family. “It smells like cheese.” His once typical lactose intolerance is now a minority view: meeting Asian demand for dairy is the biggest game in this sector. Blessed indeed are the cheesemakers. Or, at least, anyone with Warrnambool Cheese & Butter shares.

Since WCB’s joint-top shareholder, Bega Cheese, launched a bid last month, Australia’s oldest dairy producer has received offers from Canada’s Saputo and Murray Goulburn, its other big owner. This week, Japan’s Kirin bought a 9.99 per cent stake via its Lion unit. At A$9.25 a share, Kirin’s stake implies an enterprise value of A$590m, equating to a very full-flavoured 23 times trailing earnings before interest, tax, depreciation and amortisation. The current highest bid from Saputo, at A$8 a share, implies a ratio of 20. Before the fun began, WCB traded on 13. It was ripe for a takeover, but there are holes in these valuations.

Assuming that Kirin merely wants a seat at the table since WCB is a key Lion supplier, investors should snaffle Saputo’s offer sharpish. KPMG, WCB’s independent advisers, valued it at only up to 19 times. Sure, dairy is a healthy prospect for anyone who can sell into Asia. In China, the market for cheese alone has grown by an annual compound rate of 25 per cent for the past decade, according to Euromonitor. India has grown by one-sixth and even mature Australia has managed a 10th each year. Fonterra, the New Zealand co-operative with a China focus, thinks China’s milk demand will for now keep growing at twice the rate of supply. Its listed units have gained 28 per cent since being issued last year. Yummy.