Tuesday 8th July 2008
|Text too small?|
Dairy Trust, set up in 2007 to participate in the nation's liberalized dairy sector, offered NZ$2.75 a share for the rest of Open Country, a 31% premium to its last market price. As part of the transaction, Olam agreed to sell its 19.9% holding in Open Country to Dairy Trust and acquire 24.99% of Dairy Trust for a total NZ$101 million.
The deal would give Olam a cornerstone holding in Dairy Trust, which is poised to become New Zealand's second-largest dairy processor, Olam said in a statement on its website. Olam would also enter into a long-term marketing agreement for an escalating percentage of Dairy Trust's production, it said.
"Olam has a proven track record as a solid and substantial customer for Dairy Trust and Open Country," said Sam Lewis, Dairy Trust's chairman. "It holds strong marketing and distribution links throughout key export markets."
Dairy Trust has commitments for 72.4% of Open Country including Olam's stake. The capital raised - Olam will subscribe for 19.9% of Dairy Trust via new shares and buy 5.5% from existing investors - will be used mainly "to fund Dairy Trust's strategy of entering the New Zealand dairy industry on a national basis," Dairy Trust said.
Fonterra, the world's largest dairy products exporter, processes more than 90% of milk produced in New Zealand, and Dairy Trust is the only rival with plans to compete in milk processing on a national scale, the companies said.
Dairy Trust plans to help develop dairy processing facilities in the country's four major milk-producing regions, targeting capacity of 1.2 billion litres of milk.
Dairy Trust is currently 44% owned by meat processor AFFCO Holdings. After the transaction, AFFCO's stake will reduce to 35.5%, Olam would become second-largest and Talley Group third with 17%.
Dairy Trust will seek shareholder approval for the plan no later than the first week of September and make the offer for Open Country immediately.
No comments yet
EROAD Limited (NZX: ERD) launches Clarity Solo Dashcam
22nd October 2021 Morning Report
Pictor ready to roll out game-changing COVID antibody test in New Zealand
Scott Technology Limited (NZX: SCT) Announces FY21 Results
21st October 2021 Morning Report
Greenfern Industries Limited (NZX: GFI) L&Q Notice
TruScreen Group Limited (NZX: TRU) Clinical Trial Results Highlight Efficacy of TRU Technology
20th October 2021 Morning Report
Freightways Limited (NZX: FRE) Acquisition of ProducePronto
19th October 2021 Morning Report