Jul 4th 2019 /
Westland shareholders strongly support Hongkong Jingang Trade Holding Co., Limited (Jingang) proposal
Westland shareholders have voted in favour of the Scheme of Arrangement under which shares in Westland are to be acquired by Jingang, a wholly owned subsidiary of Inner Mongolia Yili Industrial Group Co., Ltd for $3.41 per share
$3.41 per share offer represents an enterprise valuation of $588 million.
The Board of Westland Co-Operative Dairy Company Limited (Westland) announced today that the Scheme has been approved by shareholders under the Companies Act, which requires special thresholds to be met: 75% or more of votes actually cast in each interest class need to be voted for the Scheme; and more than 50% of the total number of votes able to be cast must be voted for the Scheme.
Details of voting:
Westland has only one interest class of shareholders and 2,775 votes available for voting.
Chairman Pete Morrison said shareholders had shown strong support for the proposal.
“When the Board initiated the strategic review process, we did so with the full understanding that all Westland farming families needed to have a competitive milk payout. We know this has been, and is, a driving need for all shareholders.
“This proposed transaction will secure a competitive milk payout for at least 10 seasons for all of our existing shareholders and ensures that all of our existing shareholders’ milk would be picked up for 10 years.
“The offer of $3.41 per share is significantly higher than the independent adviser’s valuation range ($0.88 to $1.38 per share) and the milk supply commitment ensures a minimum price for 10 seasons of at least the Fonterra Farm Gate Milk Price.
“The Board recognises that the vote today is an important milestone in Westland’s history. While Westland will cease to be a Co-operative, the Board believes the proposed transaction represents the best available outcome for shareholders”, he said.
Jingang is a wholly-owned subsidiary of Yili, which has a strategy to grow both its domestic and global businesses. Yili is the largest dairy producer in China and Asia and its vision is to “become the most trusted healthy food provider in the world”. Yili products are sold under more than 1,000 brands and Yili owns more than 130 branches or subsidiaries.
“Yili already has a proven presence in New Zealand. It acquired Oceania Dairy Group in 2013. It has since invested approximately $660 million in establishing milk powder, infant formula and UHT production lines for Oceania.
“The Board believes that Yili is a good fit for Westland - it provides a very strong route to market as one of the world’s leading dairy producers,” he said.
The Scheme remains conditional on certain conditions, including obtaining regulatory consent from the Overseas Investment Office and receiving approval from the High Court ( with the final court hearing scheduled for 18 July).
For more information, contact:
P: 03 943 0580
C: 027 4191080
 Representing $3.41 per Share for 72,008,605 Shares outstanding plus net debt and other assumed liabilities totalling $342.5 million
July 4, 2019
Yili thanks Westland shareholders for strong vote of confidence
Chief Executive Officer of the Yili Group, Mr Jianqiu Zhang, today expressed his sincere appreciation of the faith Westland shareholders have shown in Yili to become custodians of one of New Zealand’s most trusted brands.
Westland Milk Products shareholders today voted overwhelmingly in favour of selling all shares in the cooperative to Mongolia Yili Industrial Group Co Ltd.
“We are deeply honoured that Westland shareholders have shown such strong faith in Yili to become the custodians of one of New Zealand’s most trusted brands,’’ Mr Zhang said.
“We understand how important the dairy industry is, not only to this region, but to New Zealand, and we take seriously the trust Westland’s farmers have placed in us.
“We see the future very much as a partnership arrangement with Westland farmers and want to use our expertise, resources and access to growing international markets to build a brighter future for the company, its farmers and the community.’’
The Yili offer is now subject to review by the Overseas Investment Office and the High Court. If passed, farmer shareholders will receive an immediate cash payment of $3.41 per share, as well as a ten-year guaranteed competitive milk payout
Mr Zhang said it was important for Yili to offer its farmers milk price and advance payment terms that would ensure the future viability and sustainability of its business partners.
“At our Oceania processing plant at Glenavy, we have increased the average price and advance percentages to local dairy farmers because we believe that supporting our farmers and their families is the best way to achieve our business goals.
“If our offer is passed, we will be working in a similar way with Westland to build a strong and secure future for Westland Milk.”
Mark Unsworth, Saunders Unsworth
+64 21 359 258