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Within 24 hours of signing a deal with Yili, Westland Milk Products chairman Pete Morrison was back on the West Coast talking to farmer shareholders.
Morrison says the Westland board members were keen to talk to farmers “as fast as we could and explain the deal”.
Yili, which owns Oceania Dairy in South Canterbury, will pay $588 million for Westland Milk at $3.41/share. Westland’s farmers paid $1.50 per share.
Morrison was accompanied to Auckland for the signing by deputy chair Katie Milne and board members Andrew MacPherson and Brent Taylor.
After returning from Auckland, the board held seven pocket meetings with farmer shareholders on the West Coast and in Christchurch.
Morrison says more meeting are planned in coming months; farmer shareholders will vote on the deal at a special general meeting early July.
“The board believes this is a very good deal; farmers will now think about it and then vote on the deal,” he told Rural News.
He admitted that some shareholders were dismayed by the prospect of a proud New Zealnd co-op disappearing.
“It’s a big deal for our farmers and the dairy industry throughout NZ.
For the deal to pass, at least 50% of Westland’s 350 farmer shareholders must vote, with 75% in favour.
ili has guaranteed to collect milk and pay a competitive payout of a minimum of the Fonterra farmgate milk price for 10 seasons from the season commencing August 1, 2019.
A supplier committee of five representatives from existing Westland suppliers and five representatives from Westland under the new ownership will be formed to maintain communications and transparency between existing Westland suppliers and Westland.
Morrison says the board was looking for a guaranteed milk price, guaranteed milk pick-up and maximum value for existing shares in Westland.
He says Westland shareholders know they haven’t been receiving a competitive milk price for several years.
“Farmers on the West Coast need a really competitive payout for their own survival.”