Shareholders will vote on July 4 on a proposal to sell to the Inner Mongolia Yili Industrial Group for $588 million.
A group of shareholders extremely disappointed at the lack of any viable alternative to Yili’s purchase read a powerful statement to six pre-vote meetings of Westland farmers.
The meetings followed distribution to all shareholders of the notice of meeting, scheme booklet and an independent evaluation by Grant Samuel.
Westland chairman Pete Morrison said the documents will not be made public.
“This is necessary so that shareholders can be fully and frankly informed before they make their decision.”
Dairy farmer Johno O’Connor, of Westport, said the disappointed group of 20 met again on Monday with a growing awareness of what the Yili sale will mean in the long term.
That meeting drafted the statement to be read to pre-vote meetings called by the company.
It acknowledged the financial pressures that many of the 400 farmers are under.
But it reminded farmers the co-operative has produced good results in the past, when it was well directed.
“So, to find ourselves voting on a single option, with no other options on the table has been a shock.
“It is unfair placing shareholders against each other based on our individual circumstances.
“The way our company has been run over these last few years has put shareholders into this unpalatable position.
“If we take the ($3.41 Yili) share payment it will give us some short-term respite and we all acknowledge the relief that could come with that but at what further cost?
“The cost will be our independence and control of our significant and hard-worked-for assets.
“The cost will be loss of future earnings and the realisation of our high-value, niche products.”
The company and its directors presented the Yili sale as the only option but in business there are always options, it said.
“The current board has stunningly failed to present them to us.”
Chinese consumers do not trust their locally produced food and Westland has an iconic heritage of family farming, trustworthiness, beautiful mountains, grass-fed cows, pure water and safe manufacturing methods.
“Yili want us, our story and our region to help sell their products.
“If we sell our co-operative, our hard-earned story will become their story.
“They will reap the rewards in place of us and our next generations.”
Westland still has a future but it will need courage and loyalty from shareholders, understanding from financial institutions, expert management and directors who want to succeed under farmer control and ownership.
O’Connor said the required effort to recognise the company’s position earlier and find alternatives had not been put in.
No extension of the time between the scheme booklet distribution to farmers and the vote has been granted by the company.
The independent valuation does not put enough weight on the potential of Westland’s products.
“Our location is a marketer’s dream as evidenced by how well our Westgold butter is selling.”
Personally, he will not be voting for the Yili sale and he said there are many resigned farmers who do not like how the situation has developed and the lack of any viable alternative to the proposal.
To succeed half of all shareholders and 75% those who vote must approve the sale.
