THE board of Waterford Foods plc met yesterday, but, did not make any formal decision on the takeover offer from Avonmore. And with discussions between legal representatives ongoing, it is understood that the future of finance director Mr Michael Dempsey was mentioned, but not discussed in detail.

The board of Waterford Co op meets in Dungarvan this morning, and it is understood that the Avonmore approach and the situation of the finance director will be among the main items on the agenda.

Negotiations between Mr Dempsey's lawyers and Waterford's lawyers are ongoing, but one source close to the company said a resolution is expected soon.

On the eve of the crucial Waterford Co op board meeting on the Avonmore proposal, most farmers in the south east appear in the dark about the implications of the proposal and their co op's attitude to it.

Those privy to the initial boardroom discussions on the proposal have gone to extraordinary lengths to prevent any leakage of information.

Their reticence is being justified on the basis that such information is "market sensitive". But none the less there is a growing sense of anger and frustration on the part of the co op's suppliers and shareholders.

And a survey of reaction for the Irish Farmers Journal has shown opinion on a merger to be evenly split among Waterford shareholders. Of the 126 shareholders polled by telephone, 51 per cent were in principle in favour of a merger with another group and 49 per cent against. This 51 per cent in favour is well short of the 75 per cent needed to approve any merger of takeover. And of those in favour, 77 per cent favoured Avonmore as a partner.

But the poll also shows that Avonmore Co op might have difficulties in persuading its own shareholders to approve a merger. Only 60 per cent of those surveyed agreed in principle with the idea of a merger with another co op.

Nine meetings of advisory committees of Waterford Co op are believed to have been held during the past week and attended by a cross section of Waterford suppliers. According to reports, those board members who took part in the meetings insisted that they were sworn to secrecy.

The advisory committees are the bodies which evolved from the committees of the various smaller cooperatives which were amalgamated into the Waterford Group several decades ago.

The confidentiality policy is understood to have been strongly urged by executives, and agreed upon in the course of the initial plc and co op board meetings on the Avonmore proposal last Friday.

But as a result the several thousand ordinary shareholders and milk suppliers are little wiser about the proposed deal than they were a week ago. "People are getting fairly vexed about it," said one farmer.

A perceived lack of transparency has also revived initial suspicions about the sudden and sparsely worded disclosure of the Avonmore approach.

As a result, farmer resistance to a possible merger is hardening. Opposition is coming, not only from those co op members who are not in the milk business, but from substantial pockets of the dairy farming community - particularly in areas like Castlelyons near the Cork Waterford border where dairymen have had serious differences with their coop in the past.

A number of meetings of milk suppliers have been organised by themselves and by the IFA, but in the absence of reliable information, they have been unable to arrive at any firm conclusions about the merger proposal.

Some farmers are convinced the situation will not be resolved for months, as the two conglomerates, Waterford and Avonmore, jockey to strengthen their negotiating positions, in a covert process of "talks about talks" and unofficial contacts and soundings that could drag on well into the autumn.