Kiwis regain full control of dairy empire after $54m sale

File photo / Brett Phibbs

Agribusiness mogul Alan Pye and his associates have full control of New Zealand's largest dairy farming conglomerate after South Canterbury Finance sold its $54.4 million stake in the $535 million business yesterday.

The straight-talking Temuka crop and dairy farmer yesterday expressed delight at taking full control of the 58 South Island farms.

He said he was concerned at Chinese investors buying into the New Zealand dairy industry, and pleased that 18,000ha of land and 43,400 milking cows would now be under local control.

"Of course it's important that this stays in New Zealanders' hands - 24.9 per cent of this was owned by Americans and it's come back to New Zealand," he said.

"We've done the opposite to what they're doing at the Crafar farms."

McGrathNicol's Kerryn Downey and William Black, the Auckland receivers of South Canterbury Finance, yesterday announced Dairy Holdings sale to existing New Zealand shareholders but did not name Pye or his Tauranga associates.

South Canterbury Finance owned 33.6 per cent and US shareholders 25 per cent. Pye and Dale and Colin Armer of Tauranga held the remaining shares.

Dairy Holdings' chairman Bill Baylis said there would be no need for Overseas Investment Office on the Dairy Holdings sale because the buyers were in New Zealand.

Pye confirmed yesterday he and the Armers were the buyers, and said he expected to be more involved than the Armers in the business.

The Companies Office yesterday showed Dairy Holdings' share register gave the Armers 60.6 per cent and Pye 25 per cent, with a fourth party, Jagewi, holding the rest.

But Pye referred to Dairy Holdings' beginnings and his long history with the business which also leases a further 15 grazing blocks.

"I started the thing and we've been working away at it for 12 years, milking cows ever since," he said.

Pye also said his family were Australasia's largest crop farmer.

"Between my sons and I, we're Australasia's biggest in carrots, potatoes and onions. My son Mark is growing 100,000 tonnes of vegetables a year in South Australia and Victoria," he said, referring to Parilla Premium Potatoes where Mark Pye is the managing director.

Asked if the $54.4 million payment was a bargain for the portion of Dairy Holdings he and the Armers did not own, Pye said it was "about right".

But the price was well under earlier valuation estimates which put South Canterbury Finance's stake at nearer $75.7 million when in 2008 the late Allan Hubbard transferred it to his now-failed finance company in an attempt to shore it up.

Dairy Holdings says Colin Armer is a leading North Island dairy farmer who with wife Dale holds extensive agricultural interests.

He is a Fonterra director, joining the board in 2006, and has more than 30 years' experience in dairying.

Alan Pye
* Temuka-based buyer of NZ's biggest dairy farming business.
* Family interests make him Australasia's largest crop farmer.
* Said to be happier on combine harvester than with flash toys.
* Appeared in 2008 NBR RichList at $140 million.
* Nicknamed "spud king" for his extensive potato farming interests.