One chair down, how many independents to go.... the presentation was just fluff, nothing of substance while they face legal action on a few fronts from what I hear- not in the least of which is A2
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Due diligence by foreign sounding individuals of the two assets for sale?
One of my banking contacts asked me and I said I have heard nothing.
Times like this it would be nice (like when Fletcher Paper was sold to the Norwegian crowd) to hear from staff in the businesses for sale that they are talking to foreign sounding due diligence teams!
Gotto be mindful not to fall foul of insider trading rules these days though!
Synlait have gone to fairly decent efforts to keep the Abbott contract under wraps but the production and product outflow for this customer has increased dramatically, the numbers are going surprise.
Reality Abbott won't replace A2 for a long time yet, if ever. Even at 5M units a year that is miles away from the A2 volumes
It’s only my opinion however I don’t think Synlait need to replace A2, I feel that while A2 are going to do as they are told and provide MVM some volume ( and create production space so Synlait can utilise and service other customers like Abbott) they are going are nowhere, A2 are going to continue to play their part in this symbiotic relationship that the Chinese for all intents and purposes own. A2 provide a very palatable solution to a very uncomfortable reality, that the Chinese Government owns and controls substantial offshore foreign food production assets.
It's a long stretch imo- A2 clearly dropped SML in it twice this year- once over the 2nd or was it 3rd SML profit downgrade, and then again with withdrawing exclusivity. Plenty of blending and canning capacity in NZ, and I think A2 will end up leaving over some serious issue between them and SML- so serious that they are willing to tank the SML share price and the A2 investment with it. Time will tell I guess.
I took a nibble and purchased some SML010's at 17.3% the other day. What am I missing? Balance sheet looks sound enough. Surely a bad year will not eat away all the equity?
Interesting to see CEO Watson at the a2 launch at the 2023 China International Import Expo this week. Hmmm
http://t.m.china.com.cn/convert/c_k3xW5AGv.html