Hold off on Silver Fern vote, farmers urged

Farmers are being urged to hold off voting on the Silver Fern Farms joint venture deal with Shanghai Maling, with hints that ''concrete'' alternatives will emerge.

Voting is under way and closes at 10.30am on October 14, before a special meeting in Dunedin on October 16, where two resolutions will be voted on.

As well as the Shanghai Maling proposal, the meeting will also consider the shareholder resolution, promoted by Heriot farmer Allan Richardson and John Cochrane, from Clinton, seeking full analysis of the benefits and risks of a merger with Alliance Group. That resolution was not supported by Silver Fern Farms' board.

In its information pack to shareholders, the board said it had ''thoroughly'' considered the alternatives to address the capital structure of the business, including raising equity from existing shareholders. It was unanimous Shanghai Maling's proposal was the best option.

Mr Richardson and Mr Cochrane said further options were likely, while Mr Richardson declined to identify who the competing party was.

Last month, South Island businessman John Rodwell said several agribusiness companies had clubbed together with an offer to underwrite a rights issue aimed at Silver Fern Farms' farmer shareholders. He did not return a call yesterday.

Mr Richardson and Mr Cochrane said it made ''no sense'' to give away farmer control of the co operative until all options were considered, and it was unacceptable that Silver Fern Farms shareholders had not been presented with a detailed analysis of the benefits and risks of a merger with Alliance Group.

Silver Fern Farms' board said it had engaged with Alliance Group over an extended period and no proposal for a merger had emerged from that. Alliance Group was invited to participate in the formal new capital process.

The board believed Shanghai Maling's investment was a ''superior alternative'' to the potential merger with Alliance Group and it did not believe any further evaluation of a merger was warranted at this time.

Alliance Group shareholders Jeff Grant and Gaye Cowie also earlier successfully gained support to put a resolution to a special meeting for shareholders.

It was the same resolution as that put forward by Mr Richardson and Mr Cochrane, seeking analysis of the benefits and risks of a merger. Yesterday, Mr Grant said the decision was made some time ago that Alliance Group's special meeting would follow that of Silver Fern Farms.

It was logical now to see what the outcome of the Silver Fern Farms proposal was and it would have to be reassessed if there was overwhelming support for the Shanghai Maling deal.

Asked his thoughts on the Silver Fern Farms proposal, Mr Grant said he had concerns shareholders would be able to assess the merits of a 50:50 partnership in the short time. Looking at some aspects, it did not quite sound like 50:50, he said.

Additional reporting by New Zealand Herald

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