A phantom bidder which claims to have offered a better deal for New Zealand Dairies’ South Canterbury milk powder plant than Fonterra is urging the Commerce Commission to investigate the sale process.
In a confidential submission on Fonterra’s application for clearance to buy NZ Dairies, the rival called on the Commerce Commission to “investigate the fairness of the sale process” which it says put “significant pressure” on suppliers to accept the Fonterra proposal. The unnamed bidder claimed to have trumped Fonterra’s undisclosed winning bid.
“The receivers may have elected for other reasons not to pursue the offer, but the perception that the Fonterra offer was the best is not correct, and we request that this be corrected,” the submission said.
“The Fonterra offer was clearly not the best offer on the table, but the receiver chose not to pursue other options and yet Fonterra claim not to have pursued the acquisition. This process should be investigated,” it said. . .
The unnamed rival was told its bid was unsuccessful as it needed Overseas Investment Office approval, the submission said.
The submission referred to an international equity investor whose chief executive and main shareholding are New Zealanders who are “extremely keen and interested to invest in NZ.”
The bidding company was “formed to invest in and operate dairy farming and dairy processing assets.”
The investors have primarily been in energy and recently showed an interest in pastoral farming and dairy production, the submission said.
The bidder “has for the past three years been researching the NZ dairy industry and is very interested to invest,” it said.
Fonterra’s offer was welcomed by most of NZ Dairies’ suppliers as a lifeline, not least because its offer included payment for milk supplied last season for which farmers hadn’t received payment.
Fonterra is running the plant on behalf of the receivers now. Even those suppliers who weren’t entirely enthusiastic about joining the co-operative will almost certainly prefer the devil they know than a phantom which would have to wend its way through the Overseas Investment Office approval process with no guarantee of success.