Alliance shareholders force a special meeting on benefits of industry amalgamation
By Fiona Rotherham
July 21 (BusinessDesk) - Disgruntled Alliance Group shareholders have gathered sufficient support to force a special meeting to discuss the potential benefits and risks of a merger with fellow cooperative Silver Fern Farms.
Balfour farmer Jeff Grant, who along with rural accountant and farmer, Gaye Cowie, have been gathering the required 5 percent of proxy forms needed to force the special meeting, say they have sent 7 percent to the company for verification.
The move matches a similar one by Silver Fern Farms shareholders to force a special meeting within their own meat cooperative.
Grant said their campaign started off a bit slow but gathered momentum last week with proxies coming in from farmers they hadn’t even contacted.
He said he's spoken with Alliance chairman Murray Taggart who understood shareholders have the right to seek the special meeting where they can vote on a resolution for the board to provide shareholders with a full analysis of the potential benefits and risks of Alliance Group and Silver Fern Farms merging into one cooperative entity, along with a comprehensive risk mitigation plan verified by an independent firm.
As a long-term investor in Briscoe Group, Grant said he's "read more about its strategy and the direction of the company in the back pages of the newspaper than I’ve ever read about the strategy of the two meat co-ops. When you consider that farmer shareholders’ livelihoods depends on what goes on beyond the farmgate they need to know more, in terms of their own investment, what the future holds for them.”
He said not all shareholders support holding a special meeting but it gives everyone a chance to discuss what lies ahead.
“This debate has been going at a reasonably heavy pace for the past eight years and not all shareholders agree but if there are some benefits and synergies around procurement, processing and marketing, or amalgamation or a combination of those, we want to ensure as shareholders that the board is exploring those opportunities,” Grant said.
He expects the special meeting to be held before the end of August.
Alliance has consistently said it can’t see benefit in merging with the debt-laden Silver Fern Farms. As at the end of last year, Silver Fern Farms' debt had been cut to $288.6 million from $387.6 million the previous year and it’s currently trying to raise $100 million of new capital.
Any decisions made at the special meetings won’t be binding on the meat companies’ boards.
Meat industry reform group Meat Industry Excellence, is still pushing its plan for a new export meat cooperative that would park the debts of the two big farmer-owned cooperatives into a “bad bank”. The good equity would be put into a “good bank” and the two cooperatives merged into a new company.