Shareholders in New Zealand based meat processor Alliance Group have voted in favour of an offer from Waterford-based Dawn Meats to acquire a majority stake in the co-op.
Dawn Meats will pay $270 million New Zealand dollars (€132 million) to acquire a 65 per cent shareholding in Alliance, with farmer-shareholders retaining a 35 per cent stake in the business.
A total of 2,675 shareholders voted, representing 92,495,558 shares or more than 88 per cent of all shares on issue.
Of these, more than 87 per cent voted in favour of the proposal, meeting the threshold required under the takeovers code, a statement from Dawn Meats said.
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“That is a clear mandate and strong show of confidence in our direction,” Alliance chairman Mark Wynne said in a statement.
Commenting on the outcome of the vote, Niall Browne, chief executive of Dawn Meats, said: “We are pleased and excited by the outcome of the vote by Alliance’s farmer-shareholders and we now look forward to maximising the potential of the new opportunities this strategic partnership will unlock in the future for both Dawn Meats and Alliance.
“Having the ability to now grow in partnership with some of New Zealand’s leading farmers and create a year-round supply for our customers between the northern and southern hemispheres is a fantastic opportunity and one our customers are already responding to.”
[ Dawn Meats faces paying up to €12.3m more for New Zealand dealOpens in new window ]
The outcome was despite a last-ditch attempt to derail the offer by a group of large-scale Alliance shareholders desperate to protect NZ’s last wholly farmer-owned co-operative.
The group presented an alternative plan to the board to recapitalise the co-op just 72 hours before the final vote.
The alternative plan included indicative offers for new loans from two unnamed offshore entities to refinance $188 million of bank loans due for repayment by Alliance on December 19th.
Alliance’s board rejected the proposal, which it said amounted to little more than a loan swap that would have left the co-op weighed down with debt and unable to meet interest cover covenants set by its banks.
The alternative proposal also came in for criticism from rank-and-file shareholders who said it had come too late to save the co-operative from falling under foreign control and failed to grasp the lack of appetite among its farmer owners to contribute new capital after several years of heavy losses.
The funds from Dawn will be used to pay off bank debt, with a further $40 million to be used to secure livestock supply from farmer shareholders, and the remaining $20 million retained for investment within the business.
Up to another $25 million will be paid out as a special dividend to Alliance shareholders after the co-op announced last week that it expected to beat earnings targets agreed with Dawn for the financial year just completed.
Wynne said Alliance would benefit from access to Dawn’s customer network in the UK and the European Union.
“Together we can unlock significant opportunities to create more value in the market, strengthen our competitiveness and ensure long-term profitability for our farmers,” he said.
Wynne said Alliance shareholders’ remaining 35 per cent stake and veto rights over key business decisions would ensure “that farmer influence remains central to the business”.
The transaction will now move through routine legal and regulatory steps with the new company structure due to become effective in early to late December.
