Silver Fern Farms has challenged an alternative proposal to its deal with China's largest meat processor, Shanghai Maling, calling it a mystery and urging shareholders to ignore it.
Silver Fern Farms is proposing Shanghai Maling will invest $261 million to create a new company with the co-operative, as it looks to eliminate debt.
However, earlier this week Southland farmer John Cochrane came forward proposing to raise $100 million through selling shares to farmer suppliers and said there were underwriters who had guaranteed up to $90 million in cash.
Silver Fern Farms chairman Rob Hewett said the board had not received that proposal and shareholders should treat it with caution.
"We don't know who these underwriters are. We haven't seen any proposal. We don't know whether their interests are aligned with ours and we think it's a dangerous thing to be going out there and saying these sorts of things without actually knowing who the people are that are going to be backing this."
Rob Hewett said existing farmer shareholders would have to take the underwrite out or they risked having other people in the business owning a significant stake in the company at a very low value.
He said compared to what Shanghai Maling were prepared to offer at $2.84, the underwriters may get a sizeable chunk of the business at a 40 cent issue.
"It is well meaning, I accept that, but dangerous game none the less."
He said the board would wait to see if the alternative proposal was put before it.
Silver Fern Farms is a major processor of red meat and employs more than 7000 people at peak times.
The board is travelling the country presenting the proposed deal with Shanghai Maling to its more than 6200 shareholders before they vote on it next Friday.
Rob Hewett said the feedback from farmers at the meetings had been in favour of the Shanghai Maling deal, which he said gave preferential access.
"We're going to have a very strong balance sheet as a consequence of this transaction and cash in the bank going forward. It will be a global play, they want our strategy to be brought to life around the globe."
He said it wasn't just about China - they would be free to sell their products anywhere in the world as they do currently.