Shareholders approve MG sale to Saputo

MG sale to Saputo approved by overwhelming majority


Dairy
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Murray Goulburn (MG)shareholders have voted overwhelmingly to sell the co-operative to Canadian dairy giant Saputo

Murray Goulburn co-operative shareholders have overwhelmingly voted to sell its assets and liabilities to Canadian dairy company Saputo.

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About 100 shareholders attended today’s Extraordinary General meeting, in Melbourne, opting to vote on the sale in person.

MG VOTE: Ari Mervis, Murray Goulburn chief executive Ari Mervis said the vote meant the co-operative's assets would go to a 'very credible global dairy player," in Canadian giant Saputo.

MG VOTE: Ari Mervis, Murray Goulburn chief executive Ari Mervis said the vote meant the co-operative's assets would go to a 'very credible global dairy player," in Canadian giant Saputo.

But proxies had already determined the outcome, with about 98 per cent voting for the sale.

The final vote saw 97.9pc – or 74,036,070 - of all MG shareholders voting for the sale for $1.31 billion.

Only 2.1pc of shareholders (1,586,215) voted against the deal, with 97,099 abstaining.

Chief executive Ari Mervis said the vote meant MG’s assets would be handed over to a “very credible global dairy player, with a very strong balance sheet, who was very well positioned to continue growing and expanding the business.

“There is clearly a great degree of nostalgia, with regards to the co-operative, and that is fully understandable,” Mr Mervis said.

‘While the outcome may not be universally popular, I think if everyone reflects on the requirement for MG for a fresh injection of equity into the business, in order the help it pay a competitive milk price

“The asset sale to Saputo will be in the best interests of all the relevant stakeholders.”

Asked about the reasons behind MG’s troubles, Mr Mervis said he could only speak of the 13 months since he became chief executive.

“It became quite apparent there was quite a strained relationship between the suppliers and the co-operative, which was – in fact – their asset,” Mr Mervis said.

“There was a question around the amount of trust and confidence suppliers had in MG.

“I went about an exercise of trying to restore that trust and confidence, right sizing the business, taking the very difficult, but necessary decision, to close three of the manufacturing facilities and reduce our cost base.”

Mr Mervis said it became apparent a “fresh injection of capital was required.

The other resolutions, on ordinary share capital return, non-voting share capital return and amendments to the constitution were also passed by a majority of more than 90 pc.

Shareholders agreed to an initial distribution of 80 cents a share or unit, within 10 business days of the asset sale being concluded.

Farmers were told a 40c kg/milk solids (kg/MS) step up would be applied from July 1 to October 31, last year.

An additional 40c kg/MS loyalty payment would mean an effective weighted average price of $6 kg/MS.

Saputo chief executive Lino Saputo said the company was delighted by the outcome of the shareholder vote.

“This step was a significant milestone for Saputo in the process of completing our acquisition of MG,” Mr Saputo said.

“We would like to sincerely thank MG shareholders for their support and confidence.

“We are committed to contributing to the sustainability of the Australian dairy industry and look forward to building strong relationships with our suppliers by treating them fairly, with respect and loyalty.”

Mr Saputo said the company now awaited the Foreign Investment Review Board’s (FIRB) decision.

“We remain confident in our offer and expect to be able to finalize a transaction by May 1.”

MG will hold back about $195 million to pay for legal costs and potential liabilities from legal action, currently being taken against it and its management.

The story Shareholders approve MG sale to Saputo first appeared on Stock & Land.

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