A farmers' collective thwarted in its bid to buy New Zealand's second-biggest dairy products company says it will be telling its members to hold their shares.
And that could obstruct a bid by food billionaire Graeme Hart to take over New Zealand Dairy Foods (NZDF), owner of the Anchor brand.
The Great
Milk Company (GMC) failed to snare Fonterra's 50 per cent stake in NZDF, which Fonterra is selling to Hart for $119 million.
But GMC, formed by past and present Fonterra shareholders in the North Island, says it does not plan to give up.
"We encourage farmers not to sell and we are in the process of putting together a vehicle where farmers can come together and be united," said GMC chairman George Moss.
"It'll be in either a holding company or a trust structure to protect their interests on an ongoing basis."
About 6200 farmers hold fractionally under 50 per cent of NZDF.
Hart is offering them the same $1.70 he offered Fonterra, and NZDF has its adviser, Cameron & Co, appraising that offer now.
Some farmers are upset that Fonterra did not get an independent appraisal of Hart's offer, but Fonterra has said it was an informed seller.
GMC matched the offer from Hart's Rank Group for price, but Fonterra has said other conditions favoured Rank.
Fonterra had to sell its 50 per cent stake in NZDF under conditions imposed by the Government when Fonterra was formed last year.
Dairy Farmers of New Zealand chairman Charlie Pedersen said that though he had not been involved in the sale process, he could understand Fonterra's logic.
"From a pragmatic point of view, Dairy Foods had to be sold to meet the Government's regulatory package. As time goes on, you have got to realise that the power tips into the hands of the buyers."
Pedersen said the longer the sale was delayed the smaller the pool of potential buyers would become.
- NZPA
