28 Sep 2015

SFF shareholders urged to carefully consider deal

2:50 pm on 28 September 2015

The Meat Industry Excellence Group is urging Silver Fern Farms' shareholders to carefully scrutinise the co-operative's proposal to go into a 50-50 partnership with a Chinese company.

Silver Fern Farms is continuing to meet with shareholders and suppliers this week over its plan to let China's largest meat processor, Shanghai Maling, invest $261 million into a new joint company.

Silver Fern Farms will spend the next two weeks travelling the length of the country discussing the partnership, before a vote on October 16.

Silver Fern Farms logo

Photo: Silver Fern Farms

The Meat Industry Excellence Group's chairman Peter McDonald said farmers needed to be asking questions of the co-operative's board, and to carefully evaluate the proposal.

"We're urging shareholders to start to ask the really important questions in this deal. As I understand it, there's meant to be independent analysis come out to the farmers, and talking to farmers over the weekend, that hasn't arrived in their mail box, so virtually they're conducting all these road shows first, without the really important analysis, so we hope that can get to farmers as quickly as possible.

"I understand Silver Fern shareholders are starting to ask why the low threshold of 50 percent to pass this Shanghai Maling deal. One would think it's a crucial question, 50% seems extremely low."

He believed a 75 percent pass would be acceptable in this condition.

"We've got to remember, this may well be the very last time that a Silver Fern shareholder votes on something really important in the company.

"MIE is not trying to put a spanner in the works or upset anyone's plan around this Shanghai Maling deal. What we're trying to do is make sure that Silver Fern shareholders understand fully all the implications before they sign on the dotted line."

Mr McDonald said he's still hopeful another offer could appear before the Silver Fern Farms' board, before shareholders cast their vote on the proposal.

Silver Fern Farms chairman Rob Hewett (right) and chief executive Dean Hamilton, at today's press conference at the company's Dunedin headquarters.

Silver Fern Farms chief executive Dean Hamilton (L) and chief chairman Rob Hewett Photo: Radio NZ / Ian Telfer

Meanwhile, Silver Fern Farms chief executive Dean Hamilton said there had been five meetings with shareholders, with 20 to go and he said farmers were asking a lot of questions.

"It's early days, but I think on balance (there is) strong support for the investment.

"They're [shareholders] asking about is it a long term partnership? They're talking about is this exclusive access into China? They're asking about the governance, will the board be balanced and have strong partnership philosophy?

"The kind of questions you'd expect... about such a significant transaction for the business."

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