The long-awaited special meeting finally took place this afternoon with the Silver Fern Farm’s desired outcome. 80.4 percent of shareholders voting voted in favour of the Shanghai Maling deal, a small reduction from the 82 percent that voted in favour last October, writes Allan Barber.
At today’s meeting in Dunedin, as soon as the result was announced, it appears John Shrimpton who led the requisition group shook Silver Fern Farms chairman Rob Hewitt’s hand and agreed that democracy had had its say and the campaign was over.
Not unnaturally Hewitt and chief executive Dean Hamilton are elated and relieved that the road ahead is all clear, particularly as the Overseas Investment Office (OIO) has confirmed it has received all the information it sought to enable it to make a recommendation to ministers. I have previously expressed the belief there can be no possibility of the ministers turning it down, unless the government has decided it is prepared to inflict irrevocable damage on the relationship with China. Nothing has since convinced me to change my mind.
The negative reactions to this deal demonstrate the entrenched positions that prevent any readiness to consider an alternative outcome which doesn’t correspond to the holder’s world view. I have found my critical faculties, if not my sanity, questioned by readers who don’t agree with my perspective that this deal will be the best thing for the stability of both company in particular and meat industry in general.
Like all things in life, once a decision has been made and actions taken to implement the outcome, no one can ever know what would have been the situation, if that decision had not been taken. So one side or the other can always say ‘I told you so.’
Those who predicted the loss of control of the value chain will always be able to claim things would have been so much better under continued shareholder ownership and control, while those in support of the merger will be able to point to the strengthened balance sheet and market benefits.
But in this case, I honestly don’t think there will be a loser. The cooperative shareholders will continue to own 50 percent of Silver Fern Farms and will probably receive their share of the profits as well as a competitive livestock price and secure payments. Under 100 percent Silver Fern Farms ownership, they would have shared in a higher share of the profits, but these profits may well have been lower than those from the merged company, while payments for livestock may have been progressively less competitive and less secure.
Assuming the OIO and ministers approve the deal, I am convinced SFF will prosper under its new shareholding structure and will be able to share greater profits with its shareholders, both its Chinese joint venture partner and New Zealand farmers. The way is now open for Silver Fern Farms to show the positive benefits of an innovative business partnership and prove the doubters wrong.