CHINESE dairy company Inner Mongolia Yili Industrial Group made...

CHINESE dairy company Inner Mongolia Yili Industrial Group made a bid for Murray Goulburn comparable to the successful proposal of Canadian family company Saputo Inc.
The Yili bid involved the Chinese company buying 51 per cent of MG, but leaving Australian farmers with majority control of the board, maintaining a co-operative structure and 10-year guarantees on milk prices.
But a source has told The Weekly Times the bid was not progressed because Yili was denied due diligence on MG’s finances.
MG announced last Friday it was selling the co-operative to Saputo for $1.31 billion.
The announcement came just hours before MG’s annual general meeting and shocked some dairy farmer shareholders.
Some asked the MG board to release more detail on alternative bids, questioning whether the Saputo deal was the best option.
MG chief executive officer Ari Mervis told the meeting he could not comment about individual proposals.
But it has since emerged in The Weekly Times this week New Zealand dairy company Fonterra proposed a merger of Australian assets to produce a super co-operative controlled by farmers.
Other bidders have complained they were denied due diligence on MG’s finances.
The unnamed source said the sale process was contrived to get a quick, simple result for the MG board at the expense of preserving the co-operative.
The Weekly Times understands the Yili proposal centred on it taking 51 per cent of Yili, with the remaining 49 per cent held by existing MG shareholders and unit holders.
Yili would provide cash and equity to reduce MG’s debt, then relist the new structure on the Australian Securities Exchange.
The board would be controlled by Australian dairy farmers, with an Australian independent chairman.

Yili would give a 10-year guarantee on a competitive milk price — twice as long as the Saputo guarantee of five years.
The Chinese company would also pay a loyalty bonus to dairy farmer suppliers staying longer than three years.
The deal would open up a huge market in China, as Yili is China’s biggest dairy company.

http://www.weeklytimesnow.com.au/ag...l/news-story/6664bab81ab10a25b1b61a0630bb30d4

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was the saputo deal in the best interest of MG milk farmers???hmmm