One of Britain's largest farming co-operatives is in talks to buy a 15 per cent stake in Robert Wiseman Dairies, it was confirmed yesterday.

First Milk, which supplies the company with a significant proportion of its milk, is poised to buy shares at £2.50 each - representing a premium of ten per cent on Friday's closing price.

Wiseman would not confirm reports that chairman Alan Wiseman and his brother, Robert, managing director, were in talks to sell part of their combined 55 per cent stake as part of the deal.

The company said the transaction may be done through a tender offer to all Wiseman shareholders by First Milk. A share price of 250p would value the 15 per cent stake at about £28m.

Alan Wiseman said that if the deal went ahead, there would be no change of management at the company.

He said: "We believe that this deal would strengthen the relationship that exists between the two organisations."

First Milk is a co-operative of more than 4,000 farmers, producing 2.5 billion litres of milk a year.