Ireland’s Dawn Meats has sweetened its proposed majority share bid for New Zealand’s Alliance Group under a previously agreed adjustment mechanism.
Dawn Meats confirmed in August it was seeking to take a 65% stake in the meat cooperative for NZ$250m ($143.4m today).
However, under a proviso that Alliance Group meet its full-year profit and debt targets, it was agreed Dawn Meats would pay an additional NZ$20-25m.
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That condition has now been met, Dawn Meats confirmed, as Alliance Group’s profit estimate of NZ$18-24m has exceeded its forecast, while net debt has come in lower than expected.
The additional NZ$20-25m will be paid and distributed through a dividend payment to cooperative members post completion of the transaction, which has to be approved by Alliance Group’s farmer shareholders.
A final vote tally on whether to approve the deal is expected on Monday or Tuesday of next week, Dawn Meats clarified today (16 October).
Meanwhile, NZ$40m in loyalty payments had already been agreed, meaning a total dividend payment of around NZ$60m.
In September, Alliance Group revealed that it faced the risk of “potential insolvency” if its shareholders rejected Dawn Meats’ bid to acquire the majority stake.
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By GlobalDataIn a statement on 18 September, Alliance Group chair Mark Wynne urged shareholders to accept the offer, saying “the board has unanimously recommended” the proposal.
According to Wynne, Alliance Group had “implemented significant positive change” over the past two years under a revised strategy, and it is now a “leaner, fitter and stronger business”.
Should the shareholders decide against accepting the Dawn Meats’ bid, Alliance Group suggested its options are limited.
The co-op said it could consider asset sales, site closures, and cost reductions. Alternatively, it might seek to raise capital from shareholders or other investors, or go into insolvency.
Included in the scheme booklet was a report from independent adviser Northington Partners, which suggested that the offer from Dawn Meats was the “best” and the “only one” to meet the co-op’s strategic and financial needs.
Just Food has asked Alliance Group for an update on its latest sales and profit figures ahead of next week’s shareholder vote decision.
Alliance Group, owned by about 4,300 shareholders, reported revenue of NZ$1.8bn in 2024 but posted a loss after tax of NZ$95.8m.
