ATM - A2 Milk Corporation Limited

[see weed]

https://www.youtube.com/watch?v=T6znRXbSMZY

Interview with Peter Nathan.

Good interview for a good company.

[see weed]

A2 was 100% of my portfolio a while back. It is only 40% now. The other 60% is now chasing div stocks for a couple of months. Div season is about to start. First cab off the rank for me is CEN which is a big chunck of that 60% .

From the last page for Blue Skies. Yes there is lots of dosh to be made in next couple of months chasing divs.

[couta1]

From the last page for Blue Skies. Yes there is lots of dosh to be made in next couple of months chasing divs.

Doesnt mean that you are going to make any more chasing divvies over that period though than leaving it parked here.

[sb9]

If you've a spare an hour or so its worth listening to conf call transcript with Analysts following the announcement of FY results. Especially the Q&A session and you'll understand why the current downward pressure on sp. I think its only short term trend though, should track its upward momentum soon.

https://thea2milkcompany.com/wp-cont...2-190820-1.mp3

[Leftfield]

ATM closing in on Mataura Milk. See it here.

"The a2 Milk Company (a2MC) is pleased to confirm that it is engaged in discussions with Mataura Valley Milk (MVM), a New Zealand dairy nutrition business, to explore options for a2MC to participate in manufacturing at MVM’s facility in Southland, New Zealand.

As a result of these discussions, a2MC advises that it made a non-binding indicative offer to acquire a 75.1% interest in MVM, for a total consideration of approximately NZ$270 million, based on an enterprise value of circa NZ$385 million. MVM has now agreed to provide a2MC a period of exclusivity to conduct confirmatory due diligence and negotiate definitive transaction documentation."

[sb9]

Here we go...

https://www.nzx.com/announcements/358400


The a2 Milk Company (a2MC) is pleased to confirm that it is engaged in discussions with Mataura Valley Milk (MVM), a New Zealand dairy nutrition business, to explore options for a2MC to participate in manufacturing at MVM’s facility in Southland, New Zealand.
As a result of these discussions, a2MC advises that it made a non-binding indicative offer to acquire a 75.1% interest in MVM, for a total consideration of approximately NZ$270 million, based on an enterprise value of circa NZ$385 million. MVM has now agreed to provide a2MC a period of exclusivity to conduct confirmatory due diligence and negotiate definitive transaction documentation.
The exclusivity arrangements are supported by MVM’s current majority shareholder, China Animal Husbandry Group (CAHG), which would retain a 24.9% interest in MVM alongside a2MC under the terms proposed. CAHG is a wholly owned subsidiary of China National Agriculture Development Group, which is also the parent company of a2MC’s strategic partner in China, CSFA Holdings Shanghai, Co., Ltd. (China State Farm).
Chief Executive Officer, Geoff Babidge said: “As previously announced, due to the increasing scale of our infant nutrition business, we have been assessing participation in manufacturing capacity and capability. The potential investment in Mataura Valley Milk’s recently commissioned facility, alongside China Animal Husbandry Group, aligns with this strategic objective as we look to complement and build upon our current strategic relationships with Synlait Milk and Fonterra Co-operative Group, which remain in place. Our intention would be to invest further to establish blending and canning capacity at Mataura’s facility to support the establishment of a fully integrated manufacturing plant for infant nutrition.”
The discussions with MVM are ongoing and remain incomplete, with any potential transaction subject to further due diligence, negotiation of definitive agreements, and requisite regulatory and third party approvals. Any transaction that results from the current discussions is expected to be settled towards the end of a2MC’s FY21 and would be funded entirely from existing cash reserves.

[Sideshow Bob]

Looks like a sound move - doesn't impinge on Synlait's territory, new supply, new plant, uses a little of their cash, and aligned with their partner in China. A2 will have the power to ensure MVM are competitive with what others are paying - which may have been some of MVM's problems??

Expect that many of the farmers will be heavily A2 anyway, and with settlement date a while off, gives them some time to work towards full A2 compliance.

[keenkiwiflyer]

Yet another reason to feel assured that ATM is the long term play. Happy days!

[jimdog31]

I hope citi changes their rating for the 3rd time in 3 days.

[Leftfield]

Yet another reason to feel assured that ATM is the long term play. Happy days!

Many will have missed it, but in the interview with Peter Nathan posted by sb9, Peter confirmed that A2 has also recently purchased an Australian fresh milk processor.

Things are rapidly falling into place for some more rapid growth. (Makes a bit of a farce of some analysts concerns about supposed high stock levels in the last report IMO.)

Here's sb9's link.