SML - Synlait Milk Ltd

[Bikeguy]

or did they pay it from bright's loan ?

How much was due?

[Lego_Man]

How much was due?

$1.7m by my calculation.

[Bikeguy]

I have narrowed it down to two scenarios in my head regarding SML,
That Bright want to take it over completely as cheap as they can, forcing A2 out.
That Bright want to take it over completely with A2 as a partner, as cheaply as they can.
Thoughts anyone?

[ralph]

I have narrowed it down to two scenarios in my head regarding SML,
That Bright want to take it over completely as cheap as they can, forcing A2 out.
That Bright want to take it over completely with A2 as a partner, as cheaply as they can.
Thoughts anyone?

Either way a t m have sold kiwis out thinking they are in for a pay day clever eh .
If the Chinese bang big tariffs on the European dairy sector as stated in response to the Ursula trade war then surely they will need synlaits products more than ever

[bulltrap]

I have narrowed it down to two scenarios in my head regarding SML,
That Bright want to take it over completely as cheap as they can, forcing A2 out.
That Bright want to take it over completely with A2 as a partner, as cheaply as they can.
Thoughts anyone?

My layman's guess is ultimately a partnership between Bright and A2, with Bright upping its stake to over 50% and A2 picking up the rest. Maybe similar to the 51%-49% partnership with Synlait's former parent company, prior to listing.

For Bright, the political optics of having a local partner are good, and they can keep calling Synlait their subsidiary. A2 needs to stay involved, and has deep pockets to help with recapitalisation.

[Bikeguy]

Either way a t m have sold kiwis out thinking they are in for a pay day clever eh .
If the Chinese bang big tariffs on the European dairy sector as stated in response to the Ursula trade war then surely they will need synlaits products more than ever

I’m in two minds about A2, you could be right about the selling out, but do they really have much of a choice if that’s true? I think there is a real possibility that they are trying really hard to get the best outcome for the shareholders (of which they are a big one) as possible…I feel they could be working hard behind the curtain but cannot really discuss the situation, hence why they have just really said nothing publicly about what is going on…

[Bikeguy]

My layman's guess is ultimately a partnership between Bright and A2, with Bright upping its stake to over 50% and A2 picking up the rest. Maybe similar to the 51%-49% partnership with Synlait's former parent company, prior to listing.

For Bright, the political optics of having a local partner are good, and they can keep calling Synlait their subsidiary. A2 needs to stay involved, and has deep pockets to help with recapitalisation.

I think what your saying makes the most sense…

[aperitif]

Bang on, this will be truly transformational for a2 with BD's large distribution network. Would not be surprised to see them build a stake in a2 over time...

[Bikeguy]

Bang on, this will be truly transformational for a2 with BD's large distribution network. Would not be surprised to see them build a stake in a2 over time...

Well said, It really would be transformational to the futures of both of these companies wouldn’t it,
Bright and A2 are seriously impressive companies in their own right…and when combined complete a exceptional product to market relationship that delivers value in every area, from the quality of the product through to the food security desires of China, and was making all involved some serious coin.
No one is going to be throwing that away, neither Bright nor A2, sure A2 can go to another manufacturer but we all know it’s not actually that easy and gives them no where near the access to market security Bright does, and China loves and wants the quality and security of the A2 product.
These two companies combined make an extremely profitable value proposition, do not kid yourselves in any way they both don’t know this.
I feel this company is going to be taken over by Bright, most probably in a JV with A2, at an offer somewhere between 1.80 - 2.20 (NZ) and it will be fantastic news for A2, production security, market access, profit sharing with their own supplier…all this agro between these two is just negotiating, smoke and mirrors while they sort the final ownership structure and future profit split

[aperitif]

Yes, they have the existing China State Farm agreement which has been and continues to be incredibly important. Forming an alliance/JV would put a2 in an incredibly strong position both from a manufacturing/distribution/market access standpoint, but also remove the "China rhetoric" somewhat. Having two state owned entities along for the ride;no tariffs and recent news on the "IF co operation agreement" to essentially share expertise, knowledge/experience and strengthen ties confirms this.

The IF industry in China is still far too fragmented, leading to all sorts of problems. Consolidation is happening from both in brand and manufacturing, BD know this and want a horse in the race. You only have to look at the US market where there are only three players with over 95% of the market; makes a lot more more sense from a regulatory/consumer and competitive point of view not to mention the ongoing trade up premium brands and a2 wave!