Media Updates, page-9940

A2 milk shares surge amid reported Nestle interest

By Alex Druce

Shares in dairy producer A2 Milk were trading 15 per cent higher and at a three-week peak amid speculation Swiss food and beverage giant Nestle was keeping tabs on it.

The New Zealand-based a2 - which has had an horrendous 12 months - is a reported target of Nestle, though the conglomerate is hanging out to see what a2’s latest financial results show on August 26.

A report in The Australian said insiders do not expect any moves to be made for a2 before then.

Investors were nonetheless keen on the news, sending a2’s ASX shares up 14.6 per cent to $6.83 at lunchtime.

The company was trading 11.5 per cent higher on the NZX.

Before trade on Monday, A2 had been languishing near four-year lows after enduring a terrible run over the past 12 months.

A2 Milk lost 75 per cent of its value in the nine months to May amid ongoing tribulations with the Chinese market. The company had been trading at a record $20 on the ASX in August 2020 - when it boasted a market cap of about $16 billion.

It bottomed out at $5.04, bringing its value to under $5 billion, after it slashed its sales and earnings forecasts after admitting its recent efforts to revitalise its key ‘daigou’ Chinese reseller markets had failed.

The business also wrote down $90 million in nearly out-of-date stock and announced its longstanding head of Asia Pacific had resigned from the business.

SMH Financial Section