Two-thirds of Silver Fern farmers ignore coop share offer

Friday 18th September 2009

Little more than a third of farmer shareholders in the Silver Fern Farms cooperative have taken up the new equity deal offered by the company in July as the deadline passed this evening.

The company announced tonight it is extending the offer by three weeks to October 9, blaming a busy lambing season for the low uptake, and expressing satisfaction with progress so far. A total of 13,000 transacting shareholders were eligible for the offer, accounting for 57.5 million Rebate and Supplier Investment Shares. To date a total of 12 million new shares have been subscribed for and 22 million old shares exchanged. Farmers who transact are being issued shares at an effective valuation of $4.50 a share.

"Those who do not accept the exchange offer are transferring value to those of our transacting shareholders who do exchange,” says Silver Ferns chairman Eion Garden. The subscription is "at the low end of what we envisaged," he says. "There is no success or failure level as there is no immediate cash requirement, as evidenced by the offer of deferred payment terms for shares subscribed”, he says. "This will ensure farmer shareholders are afforded the maximum opportunity to invest in their business, retain farmer ownership and control and share equitably in the company’s future," he said.

Based on the current level of acceptance, those who have exchanged, subscribed for the new ordinary shares, and who are entitled to the 1 for 4 bonus share issue, have gained shares theoretically valued at $4.50 per share based on the original valuation model, the company said in a statement to the NZX.

“At the current level of acceptance it is only those who have exchanged who will gain from the enhanced value of ordinary shares, constitutional and capital reform,” says Garden.

As a result of the extension of the closing date the shares will not be tradable on the Unlisted Exchange until after final closing date.

A copy of the investment statement relating to the Exchange Offer and Cash Issue is available on request by calling the General Counsel on 0800 362 362.

Businesswire.co.nz

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