Shareholders’ Council comment on National Foods

MEDIA RELEASE

11 April 2005

Fonterra Shareholders’ Council comment on National Foods

The Fonterra Shareholders’ Council is satisfied with the Fonterra Board’s decision to withdraw its offer for National Foods and divest its 19 per cent stake in the company.

Council Chairman John Monaghan said: “The Council is confident that this decision is in the best interests of our farmer shareholders.

“On one hand, the decision to withdraw demonstrates sound commercial discipline at Board level. However, the Australasian market is pivotal to Fonterra’s growth and National Foods was a good fit strategically for the co-operative.

“The Council will be questioning the Board around the bid process, the implementation of Fonterra’s mergers and acquisitions strategy, where we go to from here and what the next best options are.

“Council has said all along that we will hold the Board to account for their investment decisions and shareholders expect nothing less.

“The sale of the National Foods stake means Fonterra will make a sizeable gain and there is no doubt that shareholders want to see this put to good use. This means not only identifying the right opportunities, but also successfully executing them.

“Council will be seeking an assurance from the Board that Fonterra has the capabilities in place to make the most of future opportunities.“

ENDS

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