A GROUP of former Murray Goulburn suppliers is preparing to take legal action to recover their share money from the co-operative, worth up to $400,000.

The former suppliers left MG up to 12 months ago to chase a higher farm-gate milk price.

But MG has refused to refund the shares, telling the former suppliers they must wait up to five years to be paid.

MG chairman Grant Davies refused to comment on any questions regarding shares and said the issue was "between us and our shareholders."

MG shares are worth $1 each and suppliers have compulsory deductions from their monthly milk cheques to purchase shares.

The group told The Weekly Times they wanted the co-operative to give them a date upon which they would be paid. Some of the group were owed up to $180,000 in shares.

The dairy farmers, who wished to remain anonymous, told The Weekly Times when they questioned MG about the location of their share money they were told it was "in stainless steel."

When the farmers left MG, they borrowed against their share money with a financial institution to "do the right thing" and pay an outstanding loan from MG for fodder.

Their loan with the financial institution has an interest rate of 9 per cent and with only a 2 per cent return on their MG shares last year they were still out of pocket.

Existing suppliers hold ordinary MG shares, which are converted to C-class shares once a farmer leaves to supply another company.

Retired farmers' shares are converted into B-class shares.

Last year, ordinary MG share holders received an 8 per cent dividend, B-class share holders received a 6 per cent dividend and C-class shareholders received 2 per cent.

Meanwhile, MG's takeover target, Warrnambool Cheese and Butter, has predicted the Australian Competition and Consumer Commission would not give MG the green-light for a takeover.

WCB chairman Frank Davis said he understood the ACCC would be most likely to release a statement of issues to highlight areas of concern instead of providing a definite yes or no answer tomorrow.

MG sought ACCC clearance in February regarding its proposed acquisition of WCB.