jd says it is exploring a partnership in a2 with a global dairy player - Fonterra ?
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jd says it is exploring a partnership in a2 with a global dairy player - Fonterra ?
Why, Silver? And when you say "a holding", what do you mean?
I doubt very much if it would help a2MC in markets such as USA and UK if it were being described as "Chinese owned" or "Chinese controlled". That's just a reality, based on consumer perceptions and also on US commercial antagonism towards China. a2MC would be very dependent then on China itself, rather than having a truly international future. That's if we still had any shares, of course.
a2MC already has a sales deal with JD. What are the benefits to either side in JD trying to take either a minority holding or control?
Could be Deans. But more likely FF with the emphasis on healthy natural foods. JD will take up the placement equivalent which would save FF having to stump up the cash. Deans will be the other party but not sure to what extent.
Would dilute existing s/h but more than offset by far greater opportunity in both Asia and USA to drive revenue growth.
Come on you guys, sell me some more of your shares. They are up to 74-75 and going fast. We need more sellers. 36+ million have gone through since 22/6/15 announcement:t_up:.
Don't know how this article is different from the other one, but, "Billionaire Chinese internet entrepreneur Richard Liu is in talks with a global dairy company to buy a strategic stake in takeover target a2 Milk."
Global dairy as in deans? or FF?
http://www.smh.com.au/business/jdcom-founder-richard-liu-mulls-strategic-stake-in-a2-milk-20150630-gi1l57.html
^ Sounds promising
You could be right there NT, I didn't think of the Chinese issue in the states, however a lot of US stuff is manufactured in China anyway (however interestingly more is moving back to Mexico) . I figure having a large Chinese company like JB owning a chunk of A2 means plenty of exposure and the would probably market a2 more if they own part of it. However a Chinese dairy giant could use its current infrastructure to distribute a2. Much like Dean's could do in the U.S. If they owned a portion of A2.
Basically it would reduce a lot of risk that a2 faces in its new markets and speed up their market penetration.
Also gets other dairy companies interested, and if a2 is going to get a full takeover and we loose our shares in the company, at least there is a few parties interested and we make a few bucks...
Would like to hear what's going on, hopefully an announcement by weeks end.
I'm keen to hear some news. I thought the ATM board was meeting in London this week. Does anyone know if that is correct? If so, you would expect announcement tomorrow or Friday.
The SP closed at its high for the day, usually a sign of upward momentum.
Thats pretty well much what I have been saying too snapiti.could not agree more.
i think the Chinese relationship you are talking about NT is more of a gov't issue rather than a business one. Business will do what is in the interests of business first and foremost. Where there is profit there will be business. A lot of Chinese USA business relationships exist already.
ideal situation would be a 51% majority Dean's JD, freedom and continuation of NZ ownership.
That's right. Firstly, thank you to anyone here who sold me their shares today. From 2/6/15 to 22/6/15 (T.Over announcement date) 73,000,000 odd shares were bought before announcement. From 23/6/15 to now, another 32,000,000 bought. A total of 105,000,000 approx.I get this feeling the more sold, the less there will be to go around. If anyone here would like to sell me some more I am willing to pay up to ...c:). Also get this feeling there is a good announcement coming soon with all this buying going on, Nudge nudge wink wink.
What a you think...79c by weeks end? then takeover offer $1.20c . They won't be getting mine for $1.20c, maybe 3% of my holding , but that's all.
I certainly agree the present takeover discussion enhances a2MC's marketplace image and chances of doing well. I also agree there are some takeover outcomes that could be beneficial to both the company and its present shareholders. One includes a collapse of the present takeover proposals.
But there are many other scenarios, and some would not be all that beneficial to shareholders and/or the company. Of course it depends a bit what kind of shareholder you are, and how you view the company's objectives. Do you want a quick profit and then say bye-bye, or do you have an attachment to the company and want to be a longterm holder?
The company originally had a dual mission, to operate profitably and to spread the A2 message globally for health reasons. Many shareholders will say the second is just an irrelevant pious wish, but there are still some who have a strong sense of loyalty to the company and would like to see both objectives realised, which will take time. We would hate it to be taken over by Big Dairy interests who will become very disenchanted when the medical risks of their A1 milk become better known, and possibly try to bury the message.
As an incidental aside, I am currently in remission from cancer and am on a detailed diet and lifestyle regime aimed at repairing the damage to my immune system caused by the chemo and steroid treatment I received (they don't tell you much about this serious downside of being "cured" of cancer). Interestingly, my diet bans cows milk. Why? Because cows milk usually contains A1, which is now starting to be recognised as potentially damaging to the immune system that defends us against disease, including cancer. Goats and sheeps milk are okay - they're guaranteed a2.
Anyway, I would regard it as not positive if a2MC fell into the hands of mainstream dairy giants whose fear is that global consumers will be turned off cows milk as the risks of A1 become better known. Governments also are leery about this. What will they all do then?
Sorry to hear about your health issue NT. For the reasons you give is the reason why it would be ideal for at least 49% of shares to be retained by kiwi investors to share in the growth of the a2 message. Freedom is a believer in the a2 message but not sure that deans is. Hopefully the group therefore would not bury the message.
In the circumstances I agree the setup you mention would be better than most. I believe Deans accept the benefits of A2 and could be a good partner. I recall there were positive contacts between A2 Corporation and Deans at the time of A2C's first foray into the US around 2007-08.
Surprising then that Dean's has not made a concerted effort to continue with a2 milk conversion?
someone had suggested that deans markets around 99% of its milk with a1 protein.
is that able to be confirmed? Why now all of a sudden would Dean's want to be a A2 advocate?
Anyone know what % of the NZ market A2 has; i suspect a fraction of the re 9% mkt share in AUS(despite seaweeds efforts:). Why is this?.
Harrie, Deans are probably like Fonterra, they just mix it all up, so virtually all their milk has some A1 in it. But they seem to take pride in being a health-conscious outfit, and market some healthy products alongside their mainstream milk.
JT, I think I've heard a figure of a mere 3,000 litres a day of A2 milk being produced by Fresha Valley up in the far north. It may have been Fresha's boss who told me this a year or so ago. He did tell me they had just 300 a2 cows, so it sounds about right. Wouldn't surprise me if they're having to increase the herd, because A2 seems to be selling quite well now in Countdown stores and he said he would guarantee to meet all orders received (he's probably contractually obliged to). But he doesn't seem to go out of his way to sign up new outlets, and at that time he was actually disposing of some surplus A2 by mixing it into the standard milk he supplies to Auckland outlets.
Why so little? My own guess is that it's really just a sideline for Fresha Valley, which has a monopoly licence in NZ and therefore no competition until the licence expires in 2017. Dumb commercial deals were entered into by A2C back in the early days. The Fresha boss does believe in A2, but doesn't want to irritate Fonterra by building it up too much. a2MC plans to address the NZ market in 2017.
http://seekingalpha.com/article/3297...rom-dean-foods
Here's a very interesting and quite detailed analysis of the problems currently facing Dean Foods. I don't know anything about this source, but the article is full of useful info, making clear Deans is not really in much of a position to be investing in outside deals at present but seems to be on the improve following a bad period. Its interest in unconventional dairy products targeting the health-conscious is highlighted, with a reference to A2 Milk. Interested to hear what others with a better understanding of balance sheets think.
http://seekingalpha.com/article/3297...rom-dean-foods
Hopefully A2 milk is like kobe wagyu huh
"Welcome back to milk" seems like quite a good message then.
Plenty of room to grow the natural milk market given the nutritional value c/f plant based product like orange juices and other lolly water drinks.
Hugh opportunity.
Deans appears to be another synlait type operation. Its a processor, and maybe wanting to get into processing a2 milk and sharing in a2 profits.
What do the TA people think? Is it time to buy in yet?
Sacred cows: The secret to A2 Milk’s success
2 July 2015
https://www.marketingmag.com.au/hubs...milks-success/
79c on offer now. Will we breach 80c today?? It seems the mention of Chinese investors (who buy everything) has sparked confidence in a takeover?
sacred cows, now need to market them as the wagyu standard of milk! lol
I like it when someone asks a TA question - I can't be accused of ramming chicken bones down peoples throats. As you know my TA calls are a bit rough around the edges, so this is my opinion only
Attachment 7450
Yes, I'm going to mention the gap(s) :p
you will note the CONSOLIDATION between 48c and 58c area over the past few months, followed by the large gap out of that zone, on nice volume.
UNLIKE the 'common' gap, this is a BREAKAWAY gap, very bullish, as it represents breaking of an established range, and the START OF A NEW TREND
You will also note the partial retracement, as doubters took quick profits. This was roughly a 62% retracement - excellent harmonics (and 69c was the perfect no risk buy level) - and since then its been nicely trending.
Plans are good when they go to plan, so accept it's in a new uptrend at this stage.
Usually its normal for a retrace a cent or two from the morning high, but the momentum hasn't stopped today and steadily goes up. Someone is definitely accumulating regardless if we see a SH notice.
JT, I think I've heard a figure of a mere 3,000 litres a day of A2 milk being produced by Fresha Valley up in the far north. It may have been Fresha's boss who told me this a year or so ago. He did tell me they had just 300 a2 cows, so it sounds about right. Wouldn't surprise me if they're having to increase the herd, because A2 seems to be selling quite well now in Countdown stores and he said he would guarantee to meet all orders received (he's probably contractually obliged to). But he doesn't seem to go out of his way to sign up new outlets, and at that time he was actually disposing of some surplus A2 by mixing it into the standard milk he supplies to Auckland outlets.
Why so little? My own guess is that it's really just a sideline for Fresha Valley, which has a monopoly licence in NZ and therefore no competition until the licence expires in 2017. Dumb commercial deals were entered into by A2C back in the early days. The Fresha boss does believe in A2, but doesn't want to irritate Fonterra by building it up too much. a2MC plans to address the NZ market in 2017.[/QUOTE]
Thanks NT; that explains it. Hope they learn from that and come on strong in 2017. Its not a good look to see seemingly little acceptance here in NZ for A2. Fonterra doesn't have it sewn up as someone else suggested.
My tongue in cheek post about A2 being good for cats; well hey maybe it actually IS ; think of the mkt for millions of moggys!
Funny you assumed I wasn't living in NZ seaweed and funny i assumed you were.. I may put up a poll about who lives where. country wise
Every one happy with their holding,mine are up 37.8% so far. ASB portfolio up 25.6% . When is it going to stop? Not use to this sort of thing. Joshuatree, I live in NZ and so do you:).
Can you please post kirk???
I'mnot a subscriber tothe Australian, so can't access the story, but here's a statement issued by Deans that I assume the report is based on. It puts a different perspective on the analysis posted yesterday that questioned Dean Foods' ability to fund a major investment acquisition.
http://www.marketwatch.com/story/dea...ies-2015-03-26
The US-listed Dean Foods looks set to provide a strong financial ally for Freedom Foods in its play for a2 Milk after completing a *refinancing that delivered it $US1 billion ($1.3bn) in total revolving debt *facilities.
Dean Foods has entered into a new $US450 million senior secured revolving credit facility that includes a provision to raise the amount of the revolving *facility by up to $US200m.
The company has also amended and restated its existing $US550m receivables securitisation facility to extend the maturity by another three years.
At the time of the refinancing earlier this year Dean Foods chief executive Gregg Tanner said the company had the “capital structure that is more appropriate for a company of our size and industry position and that gives us the flexibility to fund our operational and strategic objectives to generate long-term shareholder value”.
Chief financial officer Chris Bellairs also noted that as fast Dean Foods “levered up in 2014, we’re beginning to lever down in 2015’’.
He added that for covenant purposes, the company’s cash on hand exceeded its senior secured indebtedness and its senior secured net leverage ratio was zero times.
Dean Foods and Freedom made an informal approach to buy a2 late last month after Freedom’s key backer, the billionaire Perich family, indicated it was concerned about a2’s expansion strategy.
The a2 board was scheduled to meet overnight in London, but nothing concrete was expected to emerge regarding the Freedom and Dean Foods approach at this stage.
There have been questions about the Perich family’s willingness to finance a full takeover bid for a2. Family patriarch Tony Perich is believed to have said the company has $100m in cash to put towards a tilt at the milk company. The Perich family owns 56 per cent of Freedom, while Freedom itself has 18.6 per cent of a2. The Perich family also directly owns a 1.3 per cent stake in a2. Freedom is also talking to its Chinese partner, New Hope Dairy, about helping finance a bid.
Seeking Alpha, a US-based crowd-sourced content service for financial markets, this week carried a report questioning the strategy of Dean Foods after its shares fell 15 per cent this year.
It claimed falling milk consumption and fluctuating prices would act against the US firm and noted it was also facing stiff competition in the plant-based non-dairy beverages industry.
It claimed that while the approach to a2 was a “step in the right direction’’, it added that “the space is extremely competitive and Dean Foods will find it difficult to win market share from peers due to its late entry’’ into the dairy alternative beverage market, which is projected to grow to $US14bn in sales by 2018.
Dean Foods last month moved to consolidate its more than 30 milk brands under one national banner known as DairyPure. Advertising for Dean’s DairyPure brand has *focused on a “fresh from your local dairy’’ image, stressing it has no antibiotics and comes from cows free of growth hormones. Dean has 36 per cent of the US milk market and is the nation’s largest milk processor by sales, which have declined.
Thanks Kirk. Interesting new stuff in there.
You can understand why Deans would want this go through particularly with declining volumes. A positive A2 message and a welcome back to milk campaign could do wonders over the next few years for them plus licensing opportunities for other continents.
On the other hand, Fonterra would be fools to let this go through. I wonder if they could go for a mega merger and buy Deans plus ATM or a significant stake in both. If global supply is increasing, A2 could be the perfect way to differentiate themselves against the rest of the pack.
Either way, Fonterra needs to do something to substantially turn around their business. Cutting costs and headcount can only do so much.
How can fonterra take a large stake in both? Their market cap is 500mil
I hear borrowing rates are quite low at the moment.
I can't imagine any of the shareholders are that happy at the moment. Dairy prices are dropping at about twice the speed of the NZD and Fonterra have played things really badly.
Imagine 5 years from now increased demand for A2 and NZ not even being in the game.
There is some interesting comments made in the article above posted by Kirk
The first is that the Perich family, indicated itwas concerned about a2’s expansion strategy.
Why is that? They could not have been concerned with stumping up with cash in a CR because the article did say that FF had $100 mil in cash to use for a buyout of a2mc?
Deans has just secured a $1 bil lending facility. The CEO says that they are deleveraging and apparently they have enough cash to cover secured debt which has probably come from the securitization of their receivables, so now they are wanting to leverage up again to buy out a2mc?
In a way they are like Fonterra. The are heading in the right direction with marketing nutritional product to compete with the dairy alternative beverage market but with a2 how is that going to sit with their "Dairy pure product" which contains the A1 protein?
Will be an interesting marketing exercise.
Yes, Fonterra and its mates in the Food Safety Authority (a government agency) dug themselves into a hole several years ago by rubbishing A2's claims, and will be somewhat nervous about its recent success commercially and scientifically, but it's hard to see how they can dig themselves out.
They must be a bit blindsided by a2MC's recent offshore success. Their hope obviously was that the company would fail to take off from its pathetic NZ base, and would never get much scientific credibiity. Wrong on both counts. My suspicion is that Fonterra would now like to reach a compromise with a2MC and take over Fresha's licence to produce A2 milk for the NZ market. Its farmers must be looking with envy at the premiums being earned for A2 milk. But Fonterra and the FSA would both have to eat a lot of their past words and Synlait would almost certainly raise objections. I don't see why a2MC would agree either, now that it's on the verge of major offshore expansion despite all the past knocking.
Well said snapiti, I'm a great advocate of seeing arrogance eat humble pie, still, I suspect that until its blindingly obvious that A1 protein has known health issues, they will continue to deny it.
Just thinking that Deans may be interested in using FF networks in China to distribute USA product. A FF, new hope, JD com, Deans partnership holding all the shares in a2mc would certainly help them given that Deans product could be channelled through Australia under the FTA
yeah probably right, but maybe a FF Deans combo
Yeah, two is company (partnership), three is crowd and four is disastrous....
I actually think that it will be a 4 party consortia, each party taking responsibility for their own territory/market. Freedom in Aus, Dean in U.S., JD in China, and who in the UK....Wiseman maybe? That makes the transaction affordable too. Roll on an announcement...if no bid is forthcoming I would like ATM to focus on the business and get the Cap Raise underway if that will accelerate the strategy.
Yes I'm starting to think that myself. When they said they were not happy with the a2mc expansion plan what they were really saying is that they don't want to front up with the cash in a CR and would rather spend it on their own expansion program. Better to get a 100% bang for a buck investing in FF than 20c odd for the same dollar investing in a2mc. Deans offers an opportunity to FF to offload a2 shares, and deans through a2mc distribute a2 milk into China, the USA UK, and Deans product into China via a2mc. Why else would they be raising NZ$1.3bil in the USA. Paying NZ$1.00 per share only uses around 50% of that facility.
At this point Deans has little international experience, and is preoccupied with re-branding its product range for the US market rather than expanding offshore. I can see why Deans could be interested in taking over a2MC or taking a major stake in it in order to expand its range of products outside the dairying mainstream and with appeal to health-conscious US consumers. But actually it could do this via a deal with a2MC without taking it over.
a2MC's present strategy is to remain a small-staffed company that sticks solely to its own knitting. As its marketing chief Susan Massasso made clear in that interview in Marketing magazine posted on this thread yesterday, its mantra is "do one thing and do it well", for which it needs fewer than 40 employees and a marketing team of fewer than 10.
So it wouldn't be at all keen on marketing non-A2 milk into China to help out a US company. And even if Deans takes it over, it would strain marketing credibility for a company called a2 if it started flogging off milk other than A2 in China, UK or anywhere else. Maybe Fonterra would be happy to do that for them.
Harrie, you also ask (post 4437) why Perich would be upset at having to put money into a cap raise and why he doesn't like a2MC's strategy. FWIW, my guess is that he has his eyes fixed on China, not the US. Just recently he signed a 50-year alliance (which also includes FF) with Guangzhou-based Shenzhen JiaLiLe Food Company to supply dairy products for Chinese kids. And last year he signed a deal with New Hope (Chengdu) under which he and FF have to invest heavily in large-scale new joint venture dairy farms in Victoria to supply the Chinese partner. That's all going to tie up a lot of money and energy, and I think that's why he doesn't like Babidge focussing on the US and wanting more capital to speed things up there.
NT, they would be after the IP, wouldn't they?
NT, doesn't it depend on the way the products are marketed for whoever owns it.
If they don't get into all the unproven stuff, they can market it as the way A2 do now which is around easier digestion.
Some cars digest 98 better than 91. I know there is a whole load of science behind A2 but is it not ok to sell both?
They can do that right now but other issues are coming up, such as autism, schizophrenia and cot death, for which the scientific evidence is mounting to the point that it will become "proven". What you call the "unproven stuff" is not going to stay unproven, and it will then become an interesting marketing exercise for a company that sells A1 milk, having to say: "Well we know the A1 milk we're selling you increases the chances of autism and schizophrenia in your family, but hey, we can also sell you A2 milk at twice the price that doesn't have these nasty risks."
Doubters find it difficult to believed that in decades ahead, drinking A1 milk is likely to be seen as a bit like smoking. ("Oh yes we all used to do it because no one could absolutely prove the risk, but now we know better".) And the purveyors of A1 will have problems. Read Woodford's book. It's not just autism and schizophrenia, it's diabetes, heart disease and even cancer - anything that the body needs an unimpaired immune system to ward off.
Well yes, largely, but why pay hundreds of millions for IP you don't really understand the implications of? That's what I'm worried may happen. Are the Chinese for instance just going to keep on producing cheap and nasty A1 milk for the masses and importing A2 by airfreight at huge prices for the wealthy, well-informed and health-conscious?Quote:
Originally Posted by Xerof
The purpose of the IP is not just to make money but to enable the establishment of A2 herds. But the Australian experience has shown farmers don't need to own the company to do that. The Chinese could start doing that right now by simply breeding from tested A2 bulls and testing their cows, gradually culling the non-pure-A2s.
[QUOTE]I didn't mean that Deans would use a2mc to distribute their milk into china but rather the myriad of other product they produce.
Having said that I do accept your point that a2mc's marketing manager wants to concentrate on one product and do that well, so using a2mc to help them with distributing other product of Deans into China is not really a goer.
So the big question remains, what do Deans intend to do with a2mc by getting involved with FF?
Freedom Foods, as a listed ASX company, has announced the details of a new alliance between itself, Perich, the Moxey farming family and New Hope (China).
http://www.asx.com.au/asxpdf/2015070...z0r3jv5lt8.pdf
This deal has actually been in the works and public knowledge for some months, as it was announced in April that the Perich and Moxey farming giants were creating a joint venture with New Hope. The new element now is that Freedom is also included, which was not the case originally.
The report in The Australian on this deal ties it in with the discussions about a takeover of a2MC, but there is not really any direct connection, and A2 is not mentioned in Freedom's announcement. Nevertheless, in Perich's mind (and the Perich family which controls Freedom is driving this whole merger) there will no doubt be plans to extend its tentacles to a2MC.
The story in The Australian makes clear the development of "greenfield" dairy farms is going to chew up a lot of effort and capital, by both Perich and Freedom. I think this supports my view that (a) Perich would rather see a2MC focussing on China than on the US, and (b) Freedom won't be wanting to lay out cash for much more of a2MC than its current 19% holding. Deans is not part of this little empire, but it'll be interesting to see if it does become involved.
The story in the Australian may be paywalled but I was able to pick it up on the open net. The guts of it follows:
Freedom Foods and the Perich family have formally cemented a new alliance with China’s New Hope Dairy Group as they continue negotiations regarding a potential purchase of a2 Milk. Under the terms of the alliance, the billionaire Perich family’s Leppington Pastoral Company will partner with New Hope, Freedom and Moxey Farms, one of Australia’s largest single-site dairy operations, in a consortium called Australian Fresh Milk Holdings.
Freedom revealed yesterday that upon completion, it would hold a strategic 10 per cent equity position in AFMH, with the balance held by Leppington Pastoral, Moxey and New Hope.
Freedom’s equity contribution will be about $7 million and AFMH will maintain a relatively conservative gearing structure. It is expected to inject around $80m into Moxey and other greenfield dairy sites.
Both Freedom Foods and New Hope Dairy will have priority access to any increases in milk production at Moxey Farm or greenfield sites acquired by the venture.
Moxey is a major supplier of milk to a2, the board of which met on Thursday night in London, but there was nothing to report on negotiations with Freedom and its bid partner, the US listed Dean Foods.
Opens up a whole lot of possibilities wrt a2mc.
FF wants to concentrate on China, and increasing the development of more supply, which will suck up a fair bit of capital. Looks like Dean's alone could be doing the acquiring of a2mc and they have plenty of capacity now to do it with substantial funding lines in place. I think that Dean's will see increasing profitability in a2mc in both the Asian and USA market so happy to go along for the ride.
Here is an issue though:
what is to stop freedom, if exiting from a2mc shares marketing something like " Moxley a1 free milk" in China and knocking a2 milk out of the picture. I am presuming that supply agreements between Moxley and a2mc for a2 milk are reviewable?
They could possibly try, although I doubt if they would resort to such tactics. One problem with launching an "a1-free" label is you have to explain to consumers what a1 is and what's wrong with it. Not easy, and it puts you at odds with marketers of milk containing a1 (most milk), which might well include some of FF's and Perich's and New Hope's own products. And in some jurisdictions it's illegal or very dicey to denigrate the opposition. That's a constraint a2MC itself faces and will face increasingly as the science becomes clearer.
Any rival wanting to compete with a2 milk would probably do better by inventing a new brand that steers clear of the A1/A2 debate up-front and just claims to be more digestible and flavoursome than other milks. I'm not an IP expert, but my guess is that in fine print it could probably then explain that it is from A2 cows.
Am I the only one awake and not watching the footy?
Anyway here we go again. This item from the Washington Post isn't about ATM but provides an excellent overview of where the US dairy industry is at, and includes references to the NZ situation, California and Deans.
http://www.stuff.co.nz/business/farm...elm-us-dairies
Nice little Summary
https://keithwoodford.wordpress.com/...-leap-forward/
Yes, an interesting overview. The paragraph near the end stating that Fonterra doesn't need to buy ATM because it already owns 50% of one of the key patents (with A2 owning the other half) seems to me somewhat beside the point.
There are two patents relating to methods of identifying the A1-A2 status of cows (and bulls). By far the most practical and commercially valuable patent covers the method that involves the DNA-testing of a few hairs from a cow's tail, and that patent belongs fully to a2MC. The other one involves testing the milk produced by each cow, and the patent for that is jointly held by a2MC and Fonterra. Some years ago Fonterra unsuccessfully sued for shared ownership of the tail-hair test patent as well, but its claim was thrown out.
Fonterra (or more precisely the former Dairy Research Institute) played a key role in the early A1-A2 research and acquired a 50% stake in the cows-milk test patent based on the assertion that A1 carries a risk of triggering type 2 diabetes. Yet it has not shown any interest in exploiting that patent, and in fact has tried, rather unconvincingly, to backtrack from the health claim underlying it. Moreover, that patent has much less utility and value than the hair-tail test patent belonging to a2MC.
Pretty well much what I said in my last post. Given that Babidge and the Perich boys have reportedly had some differences between them could result in a2mc being cut out of the picture after Freedom flogs off its a2mc shares to Deans and goes and remarkets a2 milk as something like "moxey a1 free milk" (obviously can't market the milk under the a2 brand)Quote:
If the bid fails, then a complicating factor is that ATM relies on the Moxey and Perich dairy herds for much of its Australian supply of milk. It is unknown as to the details of their current supply contracts with ATM, and whether the new AFMH entity will be bound by such contracts. Without this milk supply, the Australian arm of ATM is in big trouble
The supplier of a2 milk holds all the cards. Not an impossible feat to rebrand and educate the public but a big call.
Not saying this will happen but it is a risk IMO, especially if the Perich boys fall out with a2mc, or they think that they can go it alone and make profits that would normally be associated with a2 especially in China and SE Asia. The patents for a2 testing could be a factor that could stop it but I'm sure there are other ways of testing that could be performed without breaching patent rights.
Quote:
Here is an issue though:
what is to stop freedom, if exiting from a2mc shares marketing something like " Moxley a1 free milk" in China and knocking a2 milk out of the picture. I am presuming that supply agreements between Moxley and a2mc for a2 milk are reviewable?
I agree the situation is potentially fraught, Harrie. But there's so much we simply don't know, and with at least six actors in the mix (ATM, FF, Perich-Moxey, New Hope, Liu and Deans) the permutations are almost endless. This speculation is fascinating but very likely futile as the situation changes almost daily. There may well be other actors waiting to jump in, whom we haven't even heard about as yet.
I think it very unlikely the takeover bid will fall over - it's just a matter of whose takeover. In one potential scenario, a2MC could end up being absorbed into AFMH, a creature of Perich, in which case the terms of present supply contracts would be immaterial. My guess is that the Perich family would not let Freedom flog off its a2MC stake to Deans - it would want control of a2MC's IP and would prefer to keep the rights to the a2 label. It could do this at relatively little cost if New Hope and possibly Deans shared the tab for a joint takeover bid.
After all, the consortium would only need 51% and it's already got 20% (that we know of). Even at NZ$1 a share, another 31% would only cost around NZ$200m. Incidentally, Freedom's stake in a2MC is currently worth around $85m Australian but is valued at only A$10m on Freedom's books, due to a somewhat bizarrely explained "book keeping" change implemented last year. Not sure how that might affect the equation.
Another interesting aspect to all this is that Perich is a part owner of the a2MC processing plant at Smeaton Grange in Sydney. Not sure who calls the shots there.
But again, this is all speculation, probably idle. And let's remember, Babidge and two of his top executives are all out of the Freedom stable, and for all we know they could be having reasonably amicable talks right now.
Hope you are right NT because if a takeover is definitely on the cards, the upside looks pretty damm attractive.
Another 4Ml transacted, looks like a transfer. What does your calculations say see weed...how many we're upto now?
Yeh I thought they would have gone the other way and tipped over 10%. Interesting.
115,722,000 + shares gone in last 25 days. But I bought some more this avo.;)
Of the 14.8m shares sold by Milford, 8.6m was listed as a "transfer" rather than a sale, and took place on Friday at 75c. Not sure exactly what "transfer" means in this context. A negotiated off-market deal? A transfer to the ASX register?
I would think the hold up at the talks at the mo is because FF/Deans are talking to the shareholders like Milford ACC and NZSF about what sort of price they would be happy to sell at.
Prob the shares they had as part of the Mercer mandate and 'transferred' to whose doing the Mercer stuff now
Tied in with carry on
http://www.nzherald.co.nz/business/n...ectid=11476583
Seems as if things are in a bit of holding pattern atm...
isnt the court case against ABC due to be heard today?
Lot of sellers at 74c. Must be sick of waiting for announcement. Is anyone on here still buying at these levels?
In the midst of all the chaos last night in US markets, Dean Foods were in the green when most other stocks were down at session lows. Made me search for news but there was none. They finished the day up 2.71%.
Has anyone here bought or considered buying DF?
Someone out there sucking in sellers at 0.74c?
Yep, I likey likey when insiders are buyey buyey! (what did I just write??)
Hi Blobbles, Chenglish is the answer to your question.
Any update on the outside interest in these shares yet? Im thinning out my portfolio and these guys are on the chopping block