This is rubbish. MG farmers, last warning. Changing to a full...

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Rampagekiller

197 Posts.

01/09/17

09:29

Post #: 26920371
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Originally posted by Amused observer ↑

It would be a serious shrinking of the business if they want to go back to being a co-op and stay as a milk processor. As someone said not long ago it could become the "Gippsland Dairy Co-op".

If they want to stay with the current core business of being a milk processor and dairy product brand then a full ASX listing would be a better approach but the industry wide consequences would be greater than if they just shrink to a smaller co-op again.

But I agree that it has to be one or the other as the hybrid has been an unmitigated disaster albeit highly profitable for one or two parties.

By the way finding a value equilibrium for a whole of company buyer and the shareholders is highly unlikely as 90% of the shareholders wont support a low value and not many will pay a premium for MGC any more as the premium has gone elsewhere, but it seems they need to go down that path to satisfy some parties or at least to prove a point of it not being in the best interest of shareholders.

They could always do something clever like splitting the company into milk source and milk swap trader (co-op) and processor/brand/marketeer/exporter (asx listed) and have the co-op as the sole supplier of milk to the listed vehicle. Not too different to what Bonlac Supply Company does with Fonterra really and not too far from where they (sic: MGC) are today but it would position each entity nicely to be able to capture changes to the market faster than the current structure and would preserve value for supplier / shareholders / unitholders and debtholders. More to come...(maybe).

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This is rubbish. MG farmers, last warning. Changing to a full listed co-op to save ur life, or goes to bankruptcy to destroy ur children's life. It's ur call.

MGC Price at posting: 63.5¢ Sentiment: None Disclosure: Not Held
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