11 April 2005
PR 046/05
Fonterra's Logic Sound
Fonterra Co-operative Group's reasons for ending its offer for Australia's National Foods are logical and
understandable, said Kevin Wooding, Chairman of Dairy Farmers of New Zealand (DFNZ).
"A quick calculation suggests that Fonterra will walk away from its 19 percent investment in National Foods with a
profit of more than A$200 million -- that is a substantial amount of money and Fonterra should be congratulated for what
has turned out to be a canny investment," Mr Wooding said.
"Since Thursday (when San Miguel raised its offer to A$6.40), I have been seeking feedback from the 26 councillors of
Dairy Farmers of New Zealand on whether we supported Fonterra raising its bid for a second time.
The DFNZ council includes elected dairy farmer representatives from individual provinces, and representatives of
sharemilkers and sharemilker employers.
"Though some councillors supported a fresh bid, others expressed concerns that Fonterra might be paying too much and
would be better off walking away with a tidy profit to use in more cost-effective ways.
"Dairy farmers will be hoping that Fonterra will be looking for fresh opportunities for growth that fit its strategy and
which bring value growth for shareholders over the medium to long term.
"DFNZ has always said through this process that it had full confidence in Fonterra's board, management and advisers to
make the right decisions for its supplier shareholders. That remains the case after today's development," Mr Wooding
said.
Fonterra is owned by about 12,000 farmer suppliers, most of which are members of DFNZ, an industry group of Federated
Farmers of New Zealand (Inc).
ENDS