Tuesday, March 19, 2024

Shareholders back Westland sale

Avatar photo
Westland shareholders have voted overwhelmingly in favour of selling the 150-year-old co-operative to Yili.
Reading Time: 2 minutes

The Hongkong Jingang Trade Holding Co. Limited (Jingang), a wholly owned subsidiary of Inner Mongolia Yili Industrial Group Co. Ltd, offered shareholders $3.41 per share.

More than 93% of votes cast were in support of the deal, with just under 90% of votes able to be cast in support. 

At least 75% of votes actually cast and 50% or more of the total number of votes able to be cast were needed for the proposal to succeed.

Chairman Pete Morrison said shareholders had shown strong support for the proposal.  

“When the board initiated the strategic review process, we did so with the full understanding that all Westland farming families needed to have a competitive milk payout. We know this has been, and is, a driving need for all shareholders.

“This proposed transaction will secure a competitive milk payout for at least 10 seasons for all of our existing shareholders and ensures that all of our existing shareholders’ milk would be picked up for 10 years.

“The offer of $3.41 per share is significantly higher than the independent adviser’s valuation range ($0.88 to $1.38 per share) and the milk supply commitment ensures a minimum price for 10 seasons of at least the Fonterra farmgate milk price.

“The board recognises that the vote today is an important milestone in Westland’s history. While Westland will cease to be a co-operative, the board believes the proposed transaction represents the best available outcome for shareholders”, he said.

Yili is the largest dairy producer in China and Asia and its vision is to “become the most trusted healthy food provider in the world”.  

Yili products are sold under more than 1000 brands and it owns more than 130 branches or subsidiaries.

“Yili already has a proven presence in New Zealand. It acquired Oceania Dairy Group in 2013. It has since invested approximately $660 million in establishing milk powder, infant formula and UHT production lines for Oceania.

“The board believes that Yili is a good fit for Westland – it provides a very strong route to market as one of the world’s leading dairy producers,” Morrison said.

“We are deeply honoured that Westland shareholders have shown such strong faith in Yili to become the custodians of one of New Zealand’s most trusted brands,’’ Yili Group chief executive Jianqiu Zhang said.

“We understand how important the dairy industry is, not only to this region, but to New Zealand, and we take seriously the trust Westland’s farmers have placed in us.

“We see the future very much as a partnership arrangement with Westland farmers and want to use our expertise, resources and access to growing international markets to build a brighter future for the company, its farmers and the community.’’

He said Yili’s Oceania processing plant at Glenavy had increased the average price and advance percentages to local dairy farmers because it believed that supporting farmers and their families is the best way to achieve its business goals.  

“If our offer is passed, we will be working in a similar way with Westland to build a strong and secure future for Westland Milk.”

The deal remains conditional on certain conditions, including obtaining regulatory consent from the Overseas Investment Office and receiving approval from the High Court.

Total
0
Shares
People are also reading