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Murray Goulburn: Transparency needed over alternative bids for co-operative

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    http://www.weeklytimesnow.com.au/ag...e/news-story/2f16109a6bf85686839299d6a25cede2

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    SERIOUS questions are now emerging as to whether the agreement by the Murray Goulburn board to sell the co-operative to Canada’s Saputo Inc is “the best deal in town”.
    Details about rival bidders’ offers have been seeping out ever since The Weekly Times broke the story that New Zealand dairy company Fonterra offered to roll its Australian business and that of MG into one to be run as a super co-operative.
    The Fonterra proposal would have some merit but it was spurned by the MG board on the basis it was a non-compliant bid.
    It is now emerging a number of the other bidders were offering far more money and some superior side elements to their deals than Saputo’s winning proposal.
    But these were not allowed to be progressed to the due diligence stage and MG’s investors should be asking why.
    Some of the bidders are not unknown to MG.
    READ MORE
    MG SPURNED BIG OFFERS
    MG TO BE SOLD TO SAPUTO FOR $1.3 BILLION
    MG REJECTS FONTERRA SUPER CO-OPERATIVE PROPOSAL
    EDITORIAL: LET’S HEAR ABOUT THE BIG CO-OP
    OPINION: MG’S FATAL RESTRUCTURE
    VOX POP: HOW DAIRY FARMERS VIEW MG CO-OP SELL-OFF

    China Resources submitted an interest in the dairy co-operative, which never progressed far.
    Sources say China Resources was one of the biggest holders of MG’s notes issued in 2015 as part of the capital raising when units were listed on the Australian Securities Exchange.
    It has now emerged a joint proposal by TasAsia Dairy and Shanghai Pharma offered to keep open factories earmarked for closure by MG in May if the partners could strike a deal with the National Union of Workers over pay conditions.
    For workers at the Kiewa plant and the Edith Creek factory in Tasmania faced with remaining unemployed or moving out of the regions they live to get jobs, this may have been a palatable offer.
    Even suppliers to the Rochester factory and those in the regional town that have supported their local farmers might have found a TasAsia Dairy-Shanghai Pharma sale far more attractive than Saputo’s bid.
    For MG unit holders, some of the alternative deals may have meant a better returns to what they will receive as part of the Saputo arrangement.
    Unfortunately, they don’t get to vote on the sale deal.
    Undeniably, the Murray Goulburn saga has been one of the worst managed debacles in corporate Australia.

    It does not need to be made worse by a potentially poor sale deal.
    Shareholders and unit holders should be demanding the MG board releases the details on the other bids before a vote is held on the Saputo deal early next year — just for the sake of transparency to satisfy themselves the Canadian company’s proposal is “the best deal in town”.
    There is nothing to stop one or more of the unsuccessful suitors formally making a takeover offer over the top of the Saputo deal.
    That would test the mettle of the MG directors, who are required by law to act in the best interests of shareholders.
    It would undoubtedly put MG in play in the real market — not a contrived one — where shareholders get to see all the details of deals.
 
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