Shareholders to vote on Westland Milk Products' sale

Westland Milk Products' farmer shareholders are awaiting full disclosure from their board of directors on the proposed sale of their business to Chinese company Yili for half a billion dollars.

Shareholders are expected to vote in July on the conditional sale offer to Yili, which trades in New Zealand as Oceania.

It already operates a dairy plant at Glenavy, near Waimate.

The sale - which is already being referred to by many as a done deal - requires more than 50 per cent of the shareholder base to vote 75 per cent in favour of it, and is on the basis of Overseas Investment Office approval.

Shareholders have yet to see full details of the sale proposal.

The legalities around due diligence are in the process and all the details of the scheme of sale will be compiled into a booklet which is expected to go out next month.

The proposed sale has three stages:

• Court approval of the confidential booklet outlining details of the full sale to be supplied to all shareholders.
• A completely independent valuation of the entire assets and business of the company (already under way).
• An Overseas Investment Office (OIA) investigation into the proposed sale prior to any approval.
• The latter may not be concluded until after Westland Milk shareholders get to vote, and OIA approval would be voided by a "no vote'' from Westland farmers.

In a statement last week, Westland Milk chairman Pete Morrison said the board "remains firmly committed'' to providing shareholders with comprehensive information about the recommended proposal from Hongkong Jingang Trade Holding Co Limited ("Jingang''), a wholly-owned subsidiary of Inner Mongolia Yili Industrial Group Co Ltd ("Yili'').

Morrison said an initial series of shareholder consultation briefings was held in March and a second consultation process would take place after the scheme booklet and notice of meeting documents was sent to shareholders in mid-June.

"The scheme booklet will be a detailed document containing further information about the scheme of arrangement, the shareholder vote, Jingang (Yili) and the milk supply commitments.''

As a requirement of the scheme process, Westland's independent directors had also appointed the independent adviser to prepare a report on the merits of Jingang's proposal, Morrison said.

That report would also be provided to shareholders as part of the scheme booklet.

"The board expects the scheme booklet will be with shareholders mid-June and the shareholder vote to take place early July.''

- Greymouth Star