ANZ National Bank, the country's largest rural lender, has strengthened its alliance with Dairy Equity, pledging to buy half its management firm, despite ongoing uncertainty ahead of Fonterra's capital structure review.
NZX-listed Dairy Equity provides the public with equity exposure to Fonterra, providing farmers with cash in exchangefor giving up their beneficial rights to their Fonterra shares.
The company has blamed poor uptake of its Swap agreements on a lack of farmer understanding and "uncertainty created by the announcement by Fonterra that it was undertaking a review of its capital structure".
ANZ National Bank has agreed to buy a 50 per cent stake in DEL Management off GT & Company, the firm belonging to former managing director Geoff Taylor, who stepped down at the end of March.
ANZ National Bank has been referring customers to Dairy Equity for around three months and Brian Cloughley, managing director of DEL Management, said ANZ's decision to buy the stake was a "logical extension of that relationship".
He said the deal would give Dairy Equity a "product endorsement that we're pleased to have".
Despite the move, Taylor's company would retain a link with Dairy Equity, Cloughley said.
Taylor is also linked with ANZ National's general manager of rural banking, Charlie Graham, through a jointly owned dairy farm and the Dairy Investment Fund, which has stakes in Open Country Cheese and Kaimai Cheese.
Cloughley said he expected the deal to be concluded in weeks.
Shares in Dairy Equity closed down a cent at 0.44c.
