An attempt by a food ingredients billionaire to take over New Zealand's second biggest dairy company could head into difficulties if a farmers' collective wins the day, reports local New Zealand paper The Evening Post.
Graeme Hart, the main shareholder in Australian food ingredients firm Burns Philp, through his private vehicle, the Rank Group, made an offer of NZ$238 million (€118.8million) for New Zealand Dairy Foods (NZDF) agreeing to buy processing giant Fonterra Cooperative Group's controlling 50 per cent stake at NZ$1.70 a share.
But the Great Milk Company (GMC), formed by many past and present Fonterra shareholders, that failed to snare Fonterra's 50 per cent stake in NZDF, said this week that it has no plans to give up.
"We encourage farmers not to sell and we are in the process of putting together a vehicle where farmers can come together and be united," GMC chairman George Moss told The Evening Post.
"It'll be in either a holding company or a trust structure to protect their interests on an ongoing basis," he continued.
About 6200 farmers hold fractionally under 50 per cent of NZDF. Mr Hart is offering them the same $1.70 he offered Fonterra, and NZDF has its adviser, Cameron & Co, appraising that offer now.
Some farmers are upset Fonterra did not get an independent appraisal of Mr Hart's offer, but Fonterra has said it was an informed seller.
GMC matched the offer from Mr Hart's Rank Group for price, but Fonterra has said other conditions favoured the Rank Group. Mr Moss said farmers were "disappointed" Fonterra had not accepted GMC's bid and were unhappy about the sale process. He said over half, or 3000-plus, of Dairy Foods' farmer-shareholders voluntarily put up the money for the GMC bid - which indicates that GMC has some muscle and could be a sticky, minority shareholder if Mr Hart fails to snare all of NZDF, the paper continued.
Fonterra, formed last year from the merger of New Zealand's two largest dairy processors , was required by legislation to sell its 70 million shares in NZ Dairy Foods.