Ex directors back merger proposal

A group of former Farmlands directors have come out publicly in support of the proposed merger with South Island co-operative Combined Rural Traders.

Two Farmlands directors, Charlie Pedersen and Hugh Ritchie, resigned last week, saying they did not believe the proposal was in the best interest of members of the North Island-based co-operative.

Yesterday, a statement was issued by six former directors - John Hathaway (Bay of Plenty), Sam Robinson and Steve Wyn-Harris (Hawkes Bay), Ross Linklater (Manawatu), Roger Barton (Wairarapa) and Dennis Munro (Gisborne/Wairoa). They said they strongly believed it was a sound proposal with good commercial merits and each would be voting in favour of the merger.

Five of the group were members of the Farmlands board when it considered a potential merger with CRT six years ago.

At that time, Farmlands' market share of the rural supplies business was 12% and they believed then it was in the best interests of shareholders to instead concentrate on the gains that could be had in the North Island first.

With a change in strategic positioning and an ''excellent'' management team, that market share had grown from 12% to 27% within five years and sales from $360 million to $773 million.

The landscape had also changed, with further industry rationalisation and the growth in the size of suppliers.

The group believed the company was ''now positioned very well'' to consider the proposed merger.

''There is no credible alternative proposal from the people opposed to this merger other than reject it and we believe it unwise to turn away from a collective benefit of $38 million,'' they said.