Saputo will buy MG if shareholders agree

MG has made an announcement to the Australian Stock Exchange this morning announcing it has entered a binding agreement with WCB owner, Saputo, to sell.

Of course, that’s subject to a whole host of conditions, including the agreement of shareholders. More to come.

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6 thoughts on “Saputo will buy MG if shareholders agree

  1. this deal and all that is wrong with it has to be highlighted it must be destroyed before it has a time to grow .The UDV and there colleagues must tear it apart in next weeks and tell people to revolt against it .it bad for MG its bad for the Australian industry . You will be doing the greatest of service to the industry and eventually will be held in high regard for doing it. it has been done for all the wrong reasons

  2. This is a good summation of whats wrong with the deal

    “The tough part of all this is no matter who was standing on the Board they were going to get semi-toasted for past events and it was the banks that forced the issue so there actual choices were possibly limited. They desperately needed cash to keep the banks at bay and also desperately needed either milk supply without having to buy it from the wholesale milk pool and the worse still they had walked up the wrong path in terms of product to market.

    Essentially they ran out of time.

    As for getting between $1.0 and $1.15 per share/unit that is a high water mark although oft quoted lately. There will be costs coming out of the woodwork galore that will make that a tough ask.

    Essentially fees, costs, charges, employee accrued costs, lease and contract exit fees and potential penalties will eat in to this and if they get drip fed the buy-out funds from Saputo it will make it worse as they wont be able to use the funds to generate some interim earnings.

    When they moved from being a pure co-op to a hybrid they change the model of MGC and that was what allowed the Board to use different approval levers to get the substantial asset sale over the line, for some it was the saviour for others it was the death knell.

    Essentially the predecessors destroyed the intrinsic value of the co-op by listing part of it to raise funds for the wrong ventures.

    Somewhere between ego’s, sleepiness, naivety and arrogance many dairy farmers have had their entire life savings destroyed in one foul swoop.”

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