Fonterra Shareholders Fund

[Balance]

In the 50 years i have been in NZ all but 3 have been with dairy farming or in the last 7 years owning dairy heifers for the industry. I applied for the maxium of 50,000 and got done. I received a letter saying i did not qualify and if i had objections to let them know by 5.00 pm on the 21/nov/2012. The letter was dated the 23/nov/2012 and i received that letter on the 27/nov/2012. Have been in contact with Fonterra but got the we do not handle this it is all done by Computershare. Have rang the Waikato Times but as yet the reporter and I are always at different places and times.
I do not understand the thinking in this country. All these units could have been sold to NZ investers but there just seems to be an unholly need to flog off our top company to the Chinese and Indians,where there is certainly no return feeling toward us when they sell theire top stocks.

Indians and Chinese? How the heck in Middle Earth, Land of Hobbits and fair dinkum kiwi sheep green droppings, did they sneak in?

Hot Scottish Cream Buns! Smokey Irish Whisky! Cry us her Majesty's tears!

We cannot have that, can we, Digger?

They work too hard for their money. They don't do financial engineering like the Americans who do CDOs and Ponzi schemes so well, and caused the GFC.

We must only allow the British, Americans, Europeans and Australians who rely on borrowings just as NZ does. And who can be trusted to give us hot IPO shares like Google etc when they are listing.

And if they offer us their top stocks, we can certainly buy in using yet more borrowings.

Remind us again why many NZ stocks and companies are owned by overseas investors, Digger.

Powerco,

Turners & Growers,

Montana,

St Lukes,

Diligent,

Fletcher Energy,

Fletcher Paper,

Sky,

INL,

Wilson & Horton,

BNZ,

Trust Bank,

ASB,

Goodman Fielder,

Vertex,

NZ Farming Systems,

Contact,

Lion Nathan,

NZI,

NZ Steel,

Tranz Rail,

Opus,


etc


Oh dear, I think I am emotionally drained from listing any more.

But of the list above, I cannot find one Indian or one Chinese buyer?

Strange that.

[digger]

Impressive list Balance. You forget to add the important ones. Gave us the chicken feed and left unmentioned the big and far more significant stocks. The Crafar farms and the general world wide land grab on the part of these two countries is surely of note. But the biggest of all is the uptake in the energy sector. My point here is that we can expect nothing back in return,unlike in the western countries you mentioned.And by the way one could have always bought into Googles,Apple or Mirosoft.
Back to the Fonterra units I like David B answer the best. They could have and should have been offered to NZ's first and if that fails turn to Wall Street.

[Balance]

In the 50 years i have been in NZ all but 3 have been with dairy farming or in the last 7 years owning dairy heifers for the industry. I applied for the maxium of 50,000 and got done. I received a letter saying i did not qualify and if i had objections to let them know by 5.00 pm on the 21/nov/2012. The letter was dated the 23/nov/2012 and i received that letter on the 27/nov/2012. Have been in contact with Fonterra but got the we do not handle this it is all done by Computershare. Have rang the Waikato Times but as yet the reporter and I are always at different places and times.
I do not understand the thinking in this country. All these units could have been sold to NZ investers but there just seems to be an unholly need to flog off our top company to the Chinese and Indians,where there is certainly no return feeling toward us when they sell theire top stocks.

http://www.nzherald.co.nz/business/n...ectid=10851106

My eyes deceive me - Digger cannot be wrong!

Most of the shares went to Australians?

Australians who hardly ever consider NZ when allocating hot IPO shares?

[Balance]

Impressive list Balance. You forget to add the important ones. Gave us the chicken feed and left unmentioned the big and far more significant stocks. The Crafar farms and the general world wide land grab on the part of these two countries is surely of note. But the biggest of all is the uptake in the energy sector. My point here is that we can expect nothing back in return,unlike in the western countries you mentioned.And by the way one could have always bought into Googles,Apple or Mirosoft.
Back to the Fonterra units I like David B answer the best. They could have and should have been offered to NZ's first and if that fails turn to Wall Street.

Dug yourself a very deep methane gas filled hole there, Digger.

http://www.nzherald.co.nz/business/n...ectid=10851106

"However, there was considerable anger that 42 per cent of the total offering was allocated to offshore institutions, mainly Australians.

New Zealand investors usually receive nothing when an Australian issue is oversubscribed yet we give 42 per cent - and a 21 per cent opening price capital gain - to offshore investors when more of this could have been kept in New Zealand.

The Fonterra allocation was particularly frustrating because domestic investors have little opportunity to invest in the country's burgeoning dairy sector and the newly created units offered the first major opportunity in this regard.

With this in mind it is extremely annoying Australian superannuation and pension funds got large allocations when many of our KiwiSaver, superannuation and pension funds got only 10 per cent of the Fonterra units they were after."

Ps. When in hole, stop digging, Digger! You are almost past the point of no return.

[Balance]

http://www.nzherald.co.nz/business/n...ectid=10851106

Bal, I think Brian Gaynor sums up why NZ'ers should have had a bigger allocation. Even if many did stag the issue then at least more of Kiwi Inc would have remained in NZ's hands.

Don't forget the Kiwi taxpayer has helped develop Fronterra over the last 40 years with tax breaks (remember the queen street farmers? South island roads?) and continues to subsidise their operations by paying for the infrastrcuture (e.g. roads and ports! home consumer subsidised electricity? huge costs paid for by rates in ensuring the diary farmers don't pollute NZ's waterways? Carbon tax?).

Would love to see a real "pay for what you use" policy applied to some of our big corps rather than expecting the taxpayer to fund it and then have the corporate mandarins give it away to their mates.

Frankly, this sort of behaviour sucks big time! No wonder the americans claim our diary industry is heavily subsidised. They're right! Subsidised by the kiwi taxpayer who gets right royally screwed at every turn!

PS. Stagged this. If I got my full allocation and the first days trade price had been below issue then Belgie would have been right royally screwed by a massive cash crunch and a small loss like he's never seen before! Very nervous few weeks and that's an understatement!

Cold hard reality is that if there was no overseas demand, Fonterra would have to sell the shares for $4.50 - $100m less for the company.

Do the sums and I think you will find it was the right thing for Fonterra to build up overseas demand for the shares.

Look at FPA under issue price - who bought?

[flyingfox]

used up all the names in family to get $10000 for each, seems like the smartest choice made this year.
i dont believe it will go back to 5.5, sold half on hand on open day, will start to buy back below 6
The reason some ppl above said they dont like the 5.8- 7% return so didnt join IPO is they haven't consider Fonterra is so much different from other NZ companies, too much interest from all over the world, in many countries even 4% return is a good share, for Chinese , they dont even care about returns. so many friends ask me how to buy but only one asked me whats the expect return.....

[Jaa]

http://www.nzherald.co.nz/business/n...ectid=10851106

Don't forget the Kiwi taxpayer has helped develop Fronterra over the last 40 years with tax breaks (remember the queen street farmers? South island roads?) and continues to subsidise their operations by paying for the infrastrcuture (e.g. roads and ports! home consumer subsidised electricity? huge costs paid for by rates in ensuring the diary farmers don't pollute NZ's waterways? Carbon tax?).

This is barely the tip of the iceburg of what NZ inc has done for Fonterra and its predecessors over the years. Fonterra has special legislation and exemption from normal competition law in NZ. Farmers glamoured (rightly IMO) to maintain ownership of Fonterra in NZ hands and thus they were legislated a 95% supply monopoly.

Go back a bit further and the Ministry of Foreign Affairs was effectively the overseas market development office for the Dairy Board. Wellington's Soviet era Czech trains were a contra deal for Anchor butter negotiated by the government! Even now dairy is front and center of NZ's trade deal negotiations. In many ways NZ has staked almost everything on the success of NZ Dairy over the last 50 years.

For them to turn round and abandon NZ like this effectively shafting NZ institutions and investors is simply incredible and a disgrace. As Gaynor said why not 15-20%?

[Balance]

There was outstanding, probably unprecedented demand by New Zealand investors (both retail and institution) for this relatively small issue. It's supply and demand that sets the price of an IPO, and there was plenty of NZ demand for this and far too little supply. There was never a secret about it either. This should have been New Zealanders first and overseas investors second, or failing that, everybody was treated the same and scaled to the same extent.

Precisely my point. If Fonterra did not build up overseas demand, local investors and institutions would have laughed at the issue.

That was what happened to Dairy Equities - same concept and same structure but no demand from NZ investors.

[Balance]

This is barely the tip of the iceburg of what NZ inc has done for Fonterra and its predecessors over the years. Fonterra has special legislation and exemption from normal competition law in NZ. Farmers glamoured (rightly IMO) to maintain ownership of Fonterra in NZ hands and thus they were legislated a 95% supply monopoly.

Go back a bit further and the Ministry of Foreign Affairs was effectively the overseas market development office for the Dairy Board. Wellington's Soviet era Czech trains were a contra deal for Anchor butter negotiated by the government! Even now dairy is front and center of NZ's trade deal negotiations. In many ways NZ has staked almost everything on the success of NZ Dairy over the last 50 years.

For them to turn round and abandon NZ like this effectively shafting NZ institutions and investors is simply incredible and a disgrace. As Gaynor said why not 15-20%?

What about the Chinese? They were allocated bugger all compared to the fact that they are now Fonterra's biggest growing market.

And the Indians? They represent the biggest future potential.

What have the Australians ever done for NZ?

Looking forward to Digger's reply.

Not that I am am holding my breath.

[blobbles]

I agree David B, I wanted a hell of a lot but was told there was none left to allocate. And I know (and can see from a whole lot of people on here) that it was the same for many others.

NZer's know what fonterra's worth and we want a piece of the action. We also want a return for the years of subsidies we have given them in the form of roads, environment etc etc. Even without overseas interest I suspect it would have been oversubscribed and the price would have gone above $6.

I would have got 10000 if possible and a couple of my friends wanted me to do the same for them. Eventual allocation: 0.