Synlait Milk says not involved in talks with A2 Milk, Fonterra about potential takeover

Infant formula producer Synlait Milk says it's not involved in discussions with the a2 Milk Company or Fonterra about a potential takeover.

In an announcement posted on the NZX, Synlait noted the media reports published on Monday regarding "a potential transaction involving third parties".

It follows reports from The Australia that the two dairy companies were working on a take-private plan.

Both Fonterra and a2 Milk have refused to comment on "market speculation".

It comes as a2 milk reported its full year net profit had dropped 44 percent to $113.6 million in the year ended June, though underlying profit was up nearly 5.5 percent percent to more than $300 million, excluding the one-time costs and losses.

A2 Milk Chief executive David Bortolussi declined to comment on the media speculation around the potential buyout of its long-term supplier, Synlait, which had faced a difficult few years.

When publishing the results to the New Zealand Exchange, Synlait Milk's then chief executive Richard Wyeth and chairman George Adams told investors the financial result did not define the company's future.

"Many of you, like us, will find today's numbers frustratingly disappointing - we are all hungry for positive financial performance," the joint statement read.

"The result reflects a period where Synlait faced multiple headwinds with little choice as to how to deal with them."

Synlait's "realistic" roadmap to recovery sought to position it for future growth, grow high-margin products from existing assets and accelerate growth and future growth opportunities.

Last year, the dairy company sold its North Island operations, including its Pōkeno site, for $307 million to help the balance sheet.