What Would Synlait Be Worth to Fonterra or a2 Milk?
Speculation of a possible joint move by Fonterra and a2 Milk to buy Synlait raises a much bigger strategic question, says agribusiness expert Dr Nic Lees.
Co-op chairman Henry van der Heyden says TAF “was the first conversation people wanted to have” during his and chief executive Theo Spierings’ visit to Asia last month. Media commentary on TAF was unsettling joint-venture partners and business associates.
“They believe Fonterra has a fantastic strategy and excellent market positions but TAF is the big issue,” he told Rural News.
“Brand and reputation damage and its affect on joint-venture partners were the defining issues for us. It’s not a good place for Fonterra to be.”
The second vote is an about-turn by the Fonterra board, which in February ruled out another vote in the face of mounting pressure from disgruntled shareholders.
Fonterra shareholders opposing TAF are welcoming the second vote but warn the ballot “should not be engineered to get a positive vote”.
Ashburton farmer Eddie Glass, who spearheaded opposition to TAF, wants a simple vote on June 25. Every farmer should get a final copy of TAF, he says.
“It should clearly define TAF and have a tear-off section with a simple question: whether farmers support TAF or want the status quo.”
He suggests Fonterra Shareholders Council networkers, who look after 12-15 shareholders in their respective regions, deliver and collect ballot papers. “This will ensure almost 100% participation and we’ll be delighted to go along with it.”
Glass says meetings at which farmers listen to directors before voting are “brainwashing sessions”.
Fonterra says the special meeting on June 25 will satellite-link eight venues so all shareholders can ‘attend’ in person. The co-op board meets later this month to finalise resolutions for the meeting.
Van der Heyden could not say what the final resolution will look like. “The resolution will be signed off by the board in late May before ballot papers and supporting documents are sent out to shareholders.”
He also defended not calling the second vote earlier, saying it was in the middle of the TAF process. With 95% of TAF work to be completed by June 25, it was “more appropriate” to hold the second vote then, he says.
Van der Heyden insists a majority of Fonterra shareholders want it to “get on with TAF”. He says a small group of vocal shareholders had concerns. The media debate on TAF was splitting its shareholder base.
“We have to put a stop to this and use the special meeting to unify the shareholder base so we can get on with implementing the new, refreshed business strategy. At the moment all we are doing is destroying value and compromising potential business opportunities.”
Glass agrees the TAF debate has split the shareholder base and the Shareholders Council and hopes the second vote will be a chance to reunite.
