Bright Dairy could continue to hold or even slightly increase its 39.4% stake. But yes it would be giving up its board majority. Why would they?
If they regard the NZ government as unlikely to approve any Chinese takeover of Synlait, then the next best thing would be to consolidate the ownership between themselves and a closely aligned NZ entity (A2 Milk).
They could also view the assimilation of Synlait into A2 Milk's supply chain as positive for repairing the damage done to the value of their existing stake.
In effect, they could increase their stake to 49%, near where it once was, taking a decent size stake in a Synlait turnaround, whilst arguably maintaining a similar level of influence via A2 Milk. I do think it is risky though, for A2M. But mutual trust between A2M and a range of Chinese partners is kind of necessary when they majority of your business is China. People talk up the Chinese influence risk etc. but when it comes to A2M they seem content to let A2M do its thing and profit indirectly from it through a number of avenues.
A2M Price at posting:
$5.23 Sentiment: Buy Disclosure: Held
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