Murray Goulburn partial-float plan draws interest

26 June 2014

Australia’s biggest dairy exporter Murray Goulburn has already fielded an approach from a private equity firm looking to snap up the co-operative’s entire $500 million partial float that it is crafting with farmers.

Read the full article, The Age, Equity firms are keen to get in on Murray Goulburn float, June 25

Murray Goulburn has been working with farmers to draft a model that will not breach the co-operative structure and retain 100 per cent farmer control.

Mr Helou said it has held two ”extensive roadshows” in dairy regions this year and incorporated farmer feedback into the proposal. It will speak with farmer shareholders again in September and if successful, the partial listing will be launched early next year.

The float will be similar to Fonterra’s ”trading among farmers” scheme launched in 2012.

This allowed farmers to buy or sell Fonterra shares among themselves instead of through the co-op.

Murray Goulburn also plans to follow Fonterra in issuing non-voting scrip to non-farming investors, ensuring that farmers retain control of the company.

Although the equity raising is being designed to fund its expansion plans – which involve upgrading factories to focus more on making higher-margin products such as nutrition powders to cash in on China’s seemingly insatiable appetite for baby formula – Mr Helou said the co-operative would fund the investment even if the partial float is unsuccessful.

”We have to do it regardless,” Mr Helou said. ”The worst case scenario is we will borrow the lot.

Mr Helou said by increasing production of high-value, high-margin goods, farmers would see an increase of $1 a kilogram for milk solids, which is expected from 2017.