Meat co-op seeks capital from farmer shareholders
Meat processor Alliance Group is asking farmer shareholders to inject more capital in order to remain a 100% co-operative.
"I am a great believer that you keep plugging away until the fat lady sings," says Grant, who was a leader in a successful bid by Alliance shareholders to ask their board for a special meeting to consider merger opportunities with Silver Fern Farms.
The Chinese bid to invest $261 million in Silver Fern Farms "slightly changes the game", he jokes, and the special meeting resolutions were written before the bid was announced.
They have discussed and agreed with the Silver Fern Farms group of shareholders and the Alliance chair that they will wait for the SFF special meeting on October 16 and, subject to the outcome of that, will decide on the special meeting for Alliance.
Grant believes there has been an initial rush of enthusiasm for the Chinese deal but subsequently some debate on the offer and whether shareholders will overwhelmingly accept it.
He says there may be second option.
"We were aware there was some work done on a previous option prior to the announcement of the Chinese option and there has been some discussion of a re-proposed second offer."
He understands it is a consortium involving a number of parties.
"Our focus is still looking at whether there is a logical step for Alliance to have any discussions about shared facilities. That focus hasn't gone away but if that vote on October 16 is overwhelmingly in favour and the deal goes through, the opportunities are somewhat less than proposed initially."
He says although Silver Fern Farms will still be talking about retaining its cooperative model – which would
invest in the new Silver Fern Farms company – what legitimacy the co-op has as a shareholder is yet to be seen. Any future possibilities of collaboration would depend "whether it is just a shareholders' committee or a true co-op".
Reaching agreements within the industry "like everything in the meat industry, will be long and torturous," Grant says.
"When you think there is one solution, another one comes along .....," he says. "There is a whole range of opportunities for procurement, processing and marketing for the co-ops that would be advantageous to both groups of shareholders.
"Whether that required, even in the initial discussion, a full merger or not wasn't the issue. The issue was that fundamentally the co-ops need to formally get together and decide a strategy which would benefit both shareholders."
