Meat processor Affco is advising shareholders to reject a 37-cents-a-share takeover offer from food company Talley’s.

Talley’s has secured agreements to bring its stake in Affco to 76%, and this has triggered an automatic offer for all outstanding shares under the Takeover code, but Affco says the offer doesn’t reflect the company’s true value.

An independent committee valued Affco shares at between 34 and 44 cents, and says the current Talley’s offer doesn’t account for investment in processing plants that was funded internally.

Affco shares were trading at 38 cents on Thursday morning.