Silver Fern shareholders vote 80.4% in favour of sale to Shanghai Maling at special meeting

Friday 12th August 2016

Silver Fern Farm shareholders have reaffirmed their support for the sale of a controlling stake in New Zealand's biggest meat exporter to China's Shanghai Maling Aquarius for $261 million at a special meeting called by a minority opposed to the deal.

Some 2,610 shareholders voted, representing 62.2 percent of eligible votes, with 80.4 percent cast in favour of the deal. The transaction was originally put to a vote in October last year, attracting 82 percent support, and easily surpasses the 75 percent threshold required.

The sale was a done deal anyway, according to chairman Rob Hewett, because the company had a mandate from the first vote and wasn't going to be dissuaded if today's vote had gone against it.

About 80 dissident farmers led by John Shrimpton and Blair Gallagher had opposed the transaction, arguing that Silver Fern had other avenues to secure the capital it needs to thrive and shareholders didn't need to cede control of the company to Chinese interests. They had argued the deal constituted a major transaction for the company, requiring a special resolution, rather than the ordinary resolution put to shareholders. They also argued that supporters of the sale, under pressure from Silver Fern's bankers, painted a poorer picture of the company's finances that was actually the case to rally support.

However, the Financial Markets Authority cleared the company over its disclosures related to the deal and the transaction is now awaiting the final hurdle, a sign-off by the Overseas Investment Office, which is expected by Sept. 30. The deal is expected to be settled on Jan. 4 next year.

Hewett said the board "strongly disagreed with the negative stance on the transaction taken by Messrs Shrimpton and Gallagher."

"They have caused significant disruption and their actions have been damaging to the company," he said. "Their allegations have proven to be entirely unfounded. Independent reviews by both the Financial Markets Authority and the Registrar of Companies have found no issue with the information provided to shareholders in October 2015 or the actions of the directors."

As well as providing capital to strengthen Silver Fern's balance sheet and allow it to ramp up product development and consumer marketing, the tie-up would give the company access to Shanghai Maling's supply chain and parent Bright Food's wholesale and retail networks for distribution into China, it said at the time the deal was first flagged last year.

BusinessDesk.co.nz

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