ATM - A2 Milk Corporation Limited

**Kirk** · 21-10-2015, 12:32 PM

freedom also doing a cap raising and plan on maintaining a strategic stake in a2 and continue in the production

**sb9** · 21-10-2015, 01:09 PM

Most importantly, who picked up those that Freedom sold....

**airedale** · 21-10-2015, 01:22 PM

Freedom sold down to raise funds to invest in Popina. an oat based cereal and snack manufacturer. They plan to retain a strategic 10.4% stake in A2M. The press release gives no hint as to who bought their shares.

**stoploss** · 21-10-2015, 02:46 PM

Originally Posted by KW

That removes a potential blocking stake, should anyone else be interested in acquiring A2. At least A2 is free to move on in its own direction now.

Isn't 10 % normally considered a blocking stake , so 10.4 would still be one ?

**Harrie** · 21-10-2015, 02:53 PM

When you think about it, Perich was never in favour of a CR at any time. The reason has been and always was to invest cash where they take a larger profit share, than being a minority shareholder in another company. It shows that they are cash strapped hence their own CR and sell down of A2M. It looks like a foot in both camps...want to expand their own business, but don't want to do so at the expense of losing potential growth in A2M hence happy to maintain a 10.40% exposure in A2M. They were on a different growth path to A2M, so some of that conflict has been removed.

**blundoon** · 21-10-2015, 04:03 PM

Originally Posted by sb9

From the Australian....could only copy this little extract as its paid content.

Freedom sells down a2 Milk stake

The Perich family and its listed food group Freedom Foods have sold down a combined stake in listed milk company a2 Milk to 10.4 per cent, from 19 per cent, as Freedom conducts a capital raising this morning. Freedom sold 42.5 million a2 Milk

http://www.theaustralian.com.au/busi...-1227576607701

The Perich family and its listed food group Freedom Foods have sold down a combined stake in listed milk company a2 Milk to 10.4 per cent, from 19 per cent, as Freedom conducts a capital raising this morning.

Freedom sold 42.5 million a2 Milk shares at NZ73c each in a block trade yesterday evening for a total of $28m.
Freedom has previously earmarked its stake in a2 as being available for sale and earlier this year made an unsolicited approach to the milk company for a potential takeover, but was rebuffed.
Freedom shares have gone into a trading halt.
Freedom is also looking to raise $53 million via a non-renouncable entitlement offer and a $12m institutional placement, to raise a total of $65m.
The raising is to fund the company’s growth strategy and the acquisition of the Popina oat-based cereals and snacks manufacturer.
Freedom said it intended to maintain a strategic stake in a2 Milk.
David Hearn, the chairman of a2 Milk, said this morning the company was pleased Freedom Foods Group had chosen to retain a strategic shareholding.
“The board and management look forward to working together with FFG and all stakeholders to continue to build the a2 business and to create increasing value for all shareholders in the future,” he said.

**see weed** · 21-10-2015, 09:58 PM

Did freedom foods really want to buy out a2 milk? Or did they just pretend they wanted to buy it, to get sp up so they could get a better price for their recent sell down? Just my theory which I had about three or four weeks after the original expression of interest.

**Harrie** · 22-10-2015, 10:44 AM

Originally Posted by see weed

Did freedom foods really want to buy out a2 milk? Or did they just pretend they wanted to buy it, to get sp up so they could get a better price for their recent sell down? Just my theory which I had about three or four weeks after the original expression of interest.

I think that FF just did not want to have to stump up money to maintain their % holding just to remain a minority shareholder. Would not have surprised me if the idea was to take control of the company with Deans's help and then flog it off to another buyer as a way to exit their shareholding.
FF see themselves as a natural competitor of Ballamy's, so having checked out their growing market share in China and internationally would prefer to apply funding in that market space where they believe better and faster revenue growth can be achieved.
Its a question of whether their holding of 20% in A2M would grow faster than applying funds else where. If you want to expand quickly then, as A2M is doing, initiate a CR.
The interesting part of this which IMO is interesting is that FF is still happy to hold 10.40% of A2M. That's a fair bit of confidence shown in A2M's own growth projection, given that their main motivation was to expand their own business.