Ireland’s Dawn Meats has enhanced its proposed majority share bid for New Zealand’s Alliance Group, utilizing a previously agreed adjustment mechanism.
Dawn Meats announced in August that it aims to acquire a 65% stake in the meat cooperative for NZ$250m (approximately $143.4m today).
Nevertheless, under a condition that Alliance Group meets its full-year profit and debt targets, it was agreed that Dawn Meats would pay an additional NZ$20-25m.
Dawn Meats has now confirmed that the specified condition has been met. Alliance Group’s profit estimate of NZ$18-24m surpassed expectations, and its net debt fell below projections.
The additional NZ$20-25m will be distributed as a dividend to cooperative members post-transaction, pending approval from Alliance Group’s farmer shareholders.
A final vote on whether to approve the deal is anticipated on Monday or Tuesday of next week, as clarified by Dawn Meats today (16 October).
Furthermore, NZ$40m in loyalty payments has already been established, leading to a total dividend payout of approximately NZ$60m.
In September, Alliance Group disclosed the risk of “potential insolvency” should its shareholders reject Dawn Meats’ bid for a majority stake.
On 18 September, Alliance Group chair Mark Wynne urged shareholders to accept the offer, noting that “the board has unanimously recommended” the proposal.
According to Wynne, Alliance Group has “implemented significant positive change” over the past two years under a new strategy, resulting in a “leaner, fitter and stronger business.”
If shareholders choose not to accept Dawn Meats’ bid, Alliance Group has indicated limited options ahead.
The cooperative may need to consider asset sales, site closures, and cost reductions, or alternatively, seek capital from shareholders or other investors, or face insolvency.
A report from independent adviser Northington Partners included in the scheme booklet indicates that Dawn Meats’ offer is the “best” and the “only one” capable of fulfilling the co-op’s strategic and financial requirements.
Alliance Group, with around 4,300 shareholders, generated revenue of NZ$1.8bn in 2024 but reported a loss after tax of NZ$95.8m.
