Royal FrieslandCampina lifts stake in Synlait Milk to 9.999 percent buying shares at $3.85 apiece

Thursday 20th March 2014

Royal FrieslandCampina has lifted its stake in Synlait Milk to 9.999 percent from 7.5 percent, adding to an investment that has gained 41 percent since its NZX debut last July.

The Netherlands-based cooperative bought about 3.66 million shares at $3.85 each yesterday, according to a statement to the NZX. The shares last traded at $3.87, having sold in Synlait's initial public offering last year at $2.20 apiece.

The purchase puts the Dutch company, where the current Fonterra chief executive Theo Spierings was a senior executive until 2009, ahead of Japan's Mitsui & Co, with an 8.4 percent holding, as the second-biggest shareholder in the Canterbury-based dairy processor. China's Bright Dairy Food owns 39 percent, having been diluted during last year's IPO.

"Our working relationship with FrieslandCampina continues to develop," chairman Graeme Milne said in a statement. "They have become both a valued customer and key strategic partner, alongside our other first tier multinational customers, and we view this announcement as a positive endorsement of the growth and performance of Synlait Milk."

In January, Synlait lifted its forecast milk price for the 2014 season to a range of $8.30 to $8.40 per kilogram of milk solids from $8. It also said net profit would be between $30 million and $35 million in the year ending July 31, up from the $19.67 million forecast in the company's prospectus.

Chairman Milne said at the time that the company is benefiting from growth from its value-add products and a favourable product mix. Dairy products have helped drive New Zealand's terms of trade to a 40-year high and made China the nation's biggest export market.

BusinessDesk.co.nz

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