MANAGEMENT Breeder says marbling the way of the future. PAGE 26
MACHINERY & PRODUCTS Better quality, improved bale shape for stacking. PAGE 37
RURALNEWS
NEWS Dairy women of the year focuses on governance and strategy.
PAGE 14
TO ALL FARMERS, FOR ALL FARMERS
MAY 24, 2016: ISSUE 607
www.ruralnews.co.nz
SFF shareholders in the gun for $millions? DAVID ANDERSON
SILVER FERN Farms’ 6000 farmer shareholders could be in the gun for many millions of dollars in penalty payments and costs if the meat company’s proposed merger with Shanghai Maling is not settled by June 30. The deal that would see Shanghai Maling pay $261 million for a 50% stake in SFF – approved by 82% of farmer shareholders in a vote last October – is under threat of not meeting the June 30 deadline when it is due to go unconditional. It is possible SFF farmer shareholders (currently 100% owners of the meat company) could face penalties and
costs exceeding $40m if the Shanghai Maling proposal does not proceed by the end of June. Ironically, SFF benefited from a similar penalty payout in 2009, when the company’s proposed merger with PGG Wrightson did not proceed. PGG Wrightson defaulted on its
offer to buy a 50% shareholding in SFF for $220m, when it could not come up with the $145m first instalment because of problems financing the deal due to the global financial crisis. PGW ended up having to pay $42m to SFF in penalties and costs incurred by the meat company.
It is now understood that SFF could face similar costs – or even more – if the deal with Shanghai Maling is stymied. SFF chief executive Dean Hamilton told Rural News it was “too early to speculate” whether SFF farmers would be liable for costs should the deal not go through. He cannot say what the cost
AT LEAST 100 farmers, rural professionals and providers turned out last week for a bit of respite on the golf course. It’s the 48th year that Geoff Ingram – now retired from dairy farming – has run the tournament at the Rangitikei Golf Club, near Bulls, Manawatu. Ingram says when he started the tournament it was mainly dairy farmers who played. Now it is a mix of dairy, sheep and beef farmers, and many who service the rural community. The players came from all around the lower North Island and there was no shortage of sponsors to provide prizes, including Rural News. Ingram reckons it’s a great social occasion and an excellent opportunity for farmers to meet others in the agri sector and network. Pictured is ANZ bank’s Louis Botes (left) manning the BBQ, just one of many sponsors offering free kai on the day, along with Vince Cameron of Cervus Equipment, Feilding.
to SFF would be in the event of the deal not going ahead. “It is too early to tell this,” he told Rural News. “It’s likely there will be two angles: first, Shanghai Maling seeking damages for their lost opportunity; secondly, shareholders [seeking compensation] for the lost returns that would have been available from the sizeable $261m investment that would have been made by Shanghai Maling.” However, Hamilton did confirm that if the deal is not unconditional by June 30 it will fall through. The last part of the agreement needed, before it goes unconditional, is Overseas Investment Office (OIO) approval. Hamilton says he’s not sure when the OIO decision will come, but he is hopeful of hearing soon. “There is no strict timetable. We continue to be optimistic of a positive OIO decision this month.” Silver Fern Farms says it has about 6200 ordinary farmer shareholders. A group of about 80 shareholders – headed by ex-pat British Vietnam-based investment banker and Canterbury runholder John Shrimpton – wants the SFF/ Shanghai Maling deal overturned. The group has forced a special meeting of shareholders in its bid to overturn the proposed deal with Shanghai Maling; it says the deal would not be in the best interests of shareholders. That meeting could be held by late TO PAGE 11
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