ASX-listed Freedom Foods Group [ASX: FNP] bought almost one million shares of A2 Milk Co [NZX: ATM] this week for about $589,000 after its stake was diluted in the past year due to the issue of partly-paid shares.
The Sydney-based food company bought 942,500 shares in four transactions in A2 this week at an average price of about 62.5 cents, according to a substantial shareholder notice filed to the NZX. Freedom Foods holds about 117.9 million shares, or 17.9 percent of A2, leaving it as the biggest shareholder in the milk marketing company.
Because A2 issued partly-paid shares to executives earlier this year, Freedom Foods' stake was diluted down from 18.1 percent when it made its last disclosure in December 2012.
Shares of A2 rose 1.6 percent to 63 cents today, and have dropped 23 percent this year. The stock is rated an average 'buy' based on four analyst recommendations compiled by Reuters, with a median target price of 80 cents.
Last month A2 reported a slump in annual profit to $10,000, even as sales rose 17 percent to $111 million, as a strong kiwi dollar eroded the value of revenue and earnings.
In its Aug. 29 results announcement, Freedom Foods said it intends to keep a strategic stake in A2 in the medium-term, while keeping the option to "realise capital from the investment to support growth opportunities."
Freedom Foods said A2 offers "potentially significant value creation" through the milk marketing firm's growth in Australia and international markets.
Shares of Freedom Foods rose 3.7 percent to A$3.12 on the ASX yesterday, and have climbed 13 percent this year.
This article is tagged with the following keywords. Find out more about MyNBR Tags
- Rich Lister John Spencer of Caxton paper fame dies
- Solid Energy in better position than sold-for-a-dollar Aussie coal mine, CEO Clifford says
- Wynyard heads for clash with Shareholders Association
- MARKET CLOSE: NZ shares fall on underwhelming SkyCity outlook; Xero, MRP decline
- Telecommunications state of the nation
Most listened to
- Tech commentator Paul Brislen breaks down the latest telco sector report
- NBR reporter Tim Hunter discusses Intueri's problems
- NZ ambassador to Turkey Jonathan Curr talks about improving Turkish - NZ relations
- Hamish McNicol discusses Masala Restaurants and Kim Dotcom in this week's Court Report
- Conflict controversies, increased sports rights competition and MIA IPOs: Chelsea Armitage and Nick Grant on NZ media