Alliance farmers aim to force merger review

Alliance shareholders want a meeting of their meat co-operative to discuss the risks and benefits of a merger with Silver Ferns Farms. Photo / NZME

Disgruntled Alliance Group shareholders say they hope, within the next 10 days, to have the support from the 5 per cent of their number required to force a special meeting to discuss the potential benefits and risks of a merger with Silver Fern Farms.

Silver Fern Farms shareholders have crossed the 5 per cent threshold to force a special meeting of their meat co-operative to vote on seeking a full analysis of the benefits and risks of merging with Alliance, along with a comprehensive risk mitigation plan, verified by an independent firm.

Gaye Cowie, a rural accountant and farmer who along with Balfour farmer Jeff Grant pushed for the Alliance special meeting, said they've had good feedback from other shareholders in the past few days since launching the campaign. She wants to attract support from 5 per cent of shareholders, or 3.5 million shares, within the next 10 days to two weeks, the same time period it took to force the Silver Fern Farms meeting.

"If it doesn't stack up, it doesn't, but as shareholders we need to understand why. Farmers are ready for a change because it's not looking very good for the future of the sheep-meat industry. Our generation has to improve things for the next generation," Cowie said.

Alliance has consistently said it can't see benefit in merging with the debt-laden Silver Fern Farms. As at the end of last year, Silver Fern Farms' debt had been cut to $288.6 million from $387.6 million the previous year and it is currently trying to raise $100 million of new capital.

Meat industry reform group Meat Industry Excellence is still pushing its plan for a new export meat co-operative that would park the debts of the two big farmer-owned co-operatives into a "bad bank". The good equity would be put into a "good bank" and the two co-operatives merged into a new company.

Cowie said the meat companies can't afford to stay stuck in the past and wants the Alliance board to state its long-term strategy to shareholders and give them the opportunity to show support for an independent assessment of the business case for amalgamation.

Any votes made at either special meeting won't be binding on the meat companies' boards but Cowie said "they need to listen to what shareholders want".

A date has yet to be set for the Silver Fern Farms special meeting and the company said that the meeting will not have any more information available to consider analysis or risk mitigation of the proposed merger.