Confirmation of the sale of debt-ridden Express Dairies is expected next week in a deal which will cut down over capacity in the milk industry. Express Dairies outgoing chairman Lord Haskins said discussions were continuing, but would not confirm the bidder was Danish owned prime suspect Arla. He said: "Express has received an approach, which will be decided on fairly quickly. We welcome the prospect of consolidation in the dairy industry, but it is still only a rumour that the approach is from Arla." Analysts said Express has been up for sale since it demerged from Northern Foods three years ago. They agreed the long awaited bid, which is said to be worth £100m, must be from Arla. The other key contender, Robert Wiseman Dairies, said it had not approached, but would not rule out making a counterbid. HSBC Securities analyst Feargus Marcroft said: "I would imagine the offer of 35p a share for a company with £200m debts and requiring investment was designed to put Wiseman off making any counterbid." Another analyst said Wiseman would benefit from an Arla purchase of Express as it would reduce over capacity in the dairy industry and increase margins all round. Parts of a new business might be sold off before the merger meets regulatory approval, as Arla and Express together control almost half of supermarket milk supplies. Wiseman, as the small third player, could take new clients and increase its volumes in the fall out, according to an analyst. He added that Wiseman might want Express's Scottish dairy Claymore, a deal which would need approval from the Competition Commission. A spokeswoman from Arla refused to comment. l Lord Haskins stands down as chairman of Express Dairies this week to be succeeded by Sir David Naish. He has already handed over Northern Foods to new chairman Peter Blackburn, formerly CEO of Nestlé. {{NEWS }}

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