Wednesday, 08 April 2020 10:08

LIC shareholders torpedo Afimilk deal

Written by  Sudesh Kissun
LIC chairman Murray King. LIC chairman Murray King.

A LIC board proposal to buy a 50% stake in Israeli agri tech company Afimilk has been knocked back by shareholders.

The shock result is being blamed on uncertainty around Covid-19 and its impact on the global economy.

Over 70% of votes cast rejected the $108 million deal; only 27.5% of votes cast backed the deal. Just over 2% abstained at a special general meeting today.

LIC chairman Murray King says the board understands and respects its shareholders’ decision, particularly given these impacts and the wider domestic and global economic uncertainty. 

“The market and economic volatility seen since late February saw shareholder uncertainty and nervousness about embarking on an acquisition increase through the voting period.

 “When we announced this proposal, no one could have foreseen the rapid and unprecedented impacts of COVID-19 that resulted in material impacts on this acquisition, arising from exchange rate volatility, difficulty in efficient transfer of governance and risk of earnings impact for the Afimilk business.”

LIC announced in February that it was seeking shareholder approval to acquire a 50% stake in Afimilk, which develops and commercialises dairy farm technology and farm automation systems. The acquisition, valued at $108.7 million when announced, was conditional on a number of matters including shareholder approval.

King thanked shareholders for their careful consideration of the proposal.

“This was a significant, but achievable long-term strategic investment opportunity for LIC. The board and management team undertook a thorough and independently assessed due diligence process before recommending this investment to shareholders because it made strong commercial sense financially and strategically.

 “It is vital that LIC keeps its world-leading edge in pastoral dairy farming data, while broadening access to new information to meet future needs and challenges.”

More like this

LIC's $18m windfall

Farmer co-op LIC will pay $18 million in dividends to shareholders after a strong full-year result.

Surviving, thriving this

Winter may have just begun but most farmers are already looking ahead to the next season and the one beyond that.

Quality beef bulls wanted

Making quality beef genetics easier for dairy farmers to access is the aim of a new industry partnership.


Lindsay Farm raw milk recall

Raw milk from Central Hawke’s Bay producers Lindsay Farm is being recalled after Campylobacterbacteria was found in some product.


Carcase collection impasse

Collection of dead calves from farms around the country has stopped with farmers and the recycling company blaming each other for the impasse.

Taking NAIT seriously

North Otago calf rearer Jared Ovens believes the Mycoplasma bovis outbreak has led to more farmers embracing animal traceability.

» The RNG Weather Report

» Latest Print Issues Online

The Hound

Too soft

This old mutt wonders why multi-national, tax-dodging, fundraising organisation Greenpeace always gets a free pass from the police.

No tax

Your old mate understands that there is quite a bit of nervousness around sheep farming circles that another levy will…

» Connect with Rural News

» eNewsletter

Subscribe to our weekly newsletter