The deal will see Yili acquire 100% of Westland for NZ$3.41 (US$2.25) per share by way of a scheme of arrangement.
Chairman Pete Morrison said, “We need all shareholders to participate in the vote. This is a very important decision for Westland farmers and we want all shareholders to participate in the voting process.”
For the scheme to be approved by shareholders, at least 75% of the votes of all shareholders who are entitled to vote and who actually vote must be voted in favor of the scheme and more than 50% of the votes of all shareholders entitled to vote, whether or not actually voted, must be voted in favor of the scheme.
“Eligible shareholders can vote using one of three ways; by postal vote, appointing a proxy to vote on their behalf (and either giving them discretion, or directing them how to vote), or at the Scheme Meeting itself (either in person for individual and joint shareholders, or by appointing an authorized representative for company, trust or partnership shareholders),” Morrison said.
“Shareholders’ relevant documents can be returned by email, fax, courier, post or personally delivered to Westland’s share registrar, Link Market Services. Documents must be received by Link Market Services by 11am on July 2, 2019, which is 48 hours before the Scheme Meeting. We urge shareholders to do this well in advance to ensure they meet this deadline.
“It was pleasing that many of our shareholders attended the recent farmer consultation meetings. They showed strong interest in the proposed scheme and were keen to hear from the Jingang and Yili representatives who attended the first part of the meetings, and to discuss the Board’s reasons for its unanimous recommendation to vote in favor of the scheme, in the absence of a superior proposal.”
Morrison added that, “As expected, we had robust but open and inclusive discussions where shareholders were able to air their opinions and question the board more closely on the specifics of the proposed scheme. The next step is for shareholders to make their decision and vote.”
Under the scheme, shareholders who are existing suppliers will receive NZ$3.41 per share, and receive the benefit of Westland’s commitment (under new ownership and which is guaranteed by Jingang) to collect milk and pay a competitive payout of a minimum of the Fonterra Farm Gate Milk Price for 10 seasons from the season commencing August 1, 2019.
A Supplier Committee comprising five representatives from existing Westland suppliers and five representatives from Westland (under the new ownership) will also be formed to maintain communications and transparency between existing Westland suppliers and Westland going forward.
Yili is the largest dairy producer in China and Asia and has a strategy to grow both its domestic and global business. Yili acquired Oceania Dairy Limited in 2013 and since that time it has invested 3bn RMB (US$436m) in establishing milk powder, infant formula and UHT production lines for Oceania.
Implementation of the scheme also requires High Court approval in accordance with section 236 of the Companies Act, consent under the Overseas Investment Act, and satisfaction of other customary conditions.