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Eastpack wants to take over Satara in kiwifruit merger

Two of the kiwifruit industry's big post harvest service providers, Satara Co-operative Group Ltd and EastPack Ltd, have announced plans to merge, pending shareholder approvals, to create a new fully grower-owned supply co-operative.A merger would not onl

NZPA
Thu, 30 Sep 2010

Two of the kiwifruit industry's big post harvest service providers, Satara Co-operative Group Ltd and EastPack Ltd, have announced plans to merge, pending shareholder approvals, to create a new fully grower-owned supply co-operative.

A merger would not only optimise efficiencies and quality but also complement support for the global success of marketer Zespri and continuation of its oversight of NZ kiwifruit exports, the two chairmen said in a joint statement.

Investor shareholders in Satara -- often former kiwifruit growers -- will be offered $1.25 shares and growers with "transactor" shares will be offered a 1:1 equity stake in EastPack.

The deal is subject to conditions including 75% shareholder approval of each entity, approval from
 banks, grower commitments, and limits to the number of shareholders of each company exercising minority buy-out rights.

After the merger all growers holding transactor shares will then have the same rights, including entitlement to future rebates, which are expected to remain at not less than 20c for each class 1 tray supplied.

Satara packed 8.5 million trays of class 1 kiwifruit in 2010, and in the year to December 31, 2009, earned $56.6m with an operating profit of $3.1m before rebates, $1.3m before tax, and $900,000 after tax (equivalent to 1.6% of revenue).

By comparison, EastPack packed 16.7m trays of class fruit in 2010, and for the year to December 31, 2009, it earned $61.2m, extracting an operating profit of $8.8m before rebates, $5.3m before tax, and $3.98m after tax (6.5% of revenue).

Details of the offer will be available in a prospectus and investment statement to be released in mid-November, and the EastPack board is also considering an issue of further investor shares for all shareholders
in the merged organisation.

"We are excited that the proposed merger would mean a 100% grower ownership," said Satara's chairman, Hendrik Pieters. "There is a natural fit between these two companies.

"There will be financial benefits and increased efficiencies through leveraging our synergies, assets and skills
within a co-operative framework," he said.

EastPack chairman Ray Sharp said that to realise EastPack's vision of world class fruit from orchard to market, continued capital investment was required to upgrade and expand post harvest facilities.

"The merger will give growers the collective financial clout through their representatives on the EastPack board to make these longer term investment decisions today without placing short-term pressure on orchard-gate returns and rebates."


EastPack chief executive Tony Hawken would head the new merged co-operative, under grower directors from Satara and EastPack as well as two independent commercial directors. Board elections will be held at an annual meeting in April 2011.

The grower-owned co-operatives are aiming to mail amalgamation documents to shareholders by mid-November, hold meetings with shareholders, and have them voted in early December, with an amalgamation from January 1.

NZPA
Thu, 30 Sep 2010
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Eastpack wants to take over Satara in kiwifruit merger
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