Shares in Dairy Crest were on the rise yesterday amid speculation the company could become a takeover target.

City analysts said French producer Lactalis, which was linked with a move for the UK dairy group several years ago, could be set to launch a bid for the Cathedral City maker.

The news comes after Dairy Crest last week said in its latest trading statement that the group had paid down some of its £330m debt – potentially making the company a more attractive target for outside investors.

The company recently revealed that it lost a major milk contract with The Co-operative Group to rival Robert Wiseman following a pricing dispute.

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Wiseman and Dairy Crest cut debt amid tough trading (31 March 2011)
Robert Wiseman squeezes out Dairy Crest in milk deal with The Co-op (16 March 2011)