The Fonterra board is determined to get the share trading scheme off the ground later this year.
The co-op’s management is embarking on a strategy refresh as if TAF’s been approved. But shareholders are demanding more information especially on aspects of TAF which they feel will compromise 100% ownership and control.
This makes for an interesting week in dairy regions. Voting papers will in the next few days arrive in the mailboxes of 10,500 Fonterra shareholders.
Those papers will contain, among other things, the due diligence committee’s report. And they will spell out board resolutions on TAF.
The board is putting a special motion, reducing the size of the proposed Fonterra Shareholders Fund. But of greater interest to shareholders will be the motion to approve TAF.
Chairman Henry van der Heyden last week remained coy on whether the board will seek a simple majority to pass TAF or a 75% approval from shareholders.
There is no doubt TAF will be passed by Fonterra shareholders. But all eyes will be on the `no’ vote.
In June 2010, 89.9% supported TAF. It’s hard to see that level of support repeated on June 25.
The bitter public debate over the past 24 months has fractured the shareholder base.
Some farmers who supported the scheme in 2010 now have serious reservations.
The second vote is touted by the co-op as the final decision. Interestingly, Theo Spierings last week told the DairyNZ Farmers Forum that shareholder unity was bigger than TAF.
Unfortunately, next month’s vote shows no signs of being a unity vote.
It will divide Fonterra’s shareholder base into two camps; one for TAF, the other against.
Let’s hope that on June 26, New Zealand doesn’t wake up to find the Fonterra’s hardworking shareholder base fractured beyond repair.
