Fonterra vote on share trading today

On-line voting on whether or not Fonterra shares can be traded among suppliers closed on Monday, shareholders have a last chance to vote, in person, at meetings being held this morning.

I’ll be surprised if the vote isn’t in favour of the proposal.

Allowing shareholders to trade shares amongst themselves rather than through the company makes sense. It reduces the redemption risk the company now has in having to buy shares from suppliers who leave the co-operative.

Another part of the proposal is for a Fonterra Shareholders’ Fund which would issue units to the public to buy share rights from farmers. They would get benefits from distributions and changes in market value, but wouldn’t get voting and milk payment rights.

This would give the company an injection of capital without any loss of control by suppliers.

Some might wonder why anyone would want shares without the right to vote. But if voting records in most public companies is a guide, a whole lot of people own shares in lots of enterprises now without ever exercising their right to vote.

3 Responses to Fonterra vote on share trading today

  1. Adolf Fiinkensein says:

    Yes indeed. It’s called investing.

  2. Gravedodger says:

    Having been forced over my farming career to buy shares/contribute capital to too many farmer controlled commercial entities to access their services and then seen the money evaporate as some wideboy comes along and sees an opportunity for enhancing his, rarely hers, economic position,I would be unlikely to show interest in even Fonterra where my money would be at the risk of actions controlled by others with different agendas and totally denied me.
    New Zealand’s dairy industry has been subject to scrutiny and even pressure from major competitors overseas attacking the cooperative, closed, commercial structure with an alleged monopoly and should a future government choose to make an arbitrary law change in the face of trade pressure or stupid social/populist reasons an investment could be obliterated or at the very least severely reduced in value. Remember the Auckland Airport share debacle when the Canadian Pension Fund attempted to buy a large stake and Mr Cullen’s (yes the rail king) intervened and no one raised a successful counter. Ask an investor who was ready to sell to the CPF.

  3. Adolf Fiinkensein says:

    Ninety percent approval

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