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Home >> Local News >> Rural

Eastpack and Satara to merge

Posted at 3:45pm Monday 04 Feb, 2013

Post-harvest kiwifruit operators EastPack and Satara are announcing long rumoured merger plans today after directors signed a merger implementation agreement.

The two companies are obvious merger partners, say chairmen Ray Sharp and Hendrik Pieters. 


“Their respective strengths and the benefits that will follow from the proposed merger will provide a much stronger platform to deal with the challenges that the industry is now facing, particularly Psa,” they say in a statement announcing the merger plans.

Shareholders will be sent merger information packs, including a chairmen's letter, the investment statement and amalgamation proposal for the upcoming shareholder meetings, which will take place in late February. 

If approved by shareholders, the merger will become effective in March in time for the 2013 packing season. 

It is proposed that Satara grower shareholders will receive one EastPack Transactor share for each dollar paid-up on their Satara Transactor shares, one EastPack Investor share for each Satara Investor share held, a five cent fully imputed special dividend for each Investor Share held and an opportunity to purchase additional EastPack Investor shares at 65 cents a share.

Satara non-grower investors and grower investor shareholders holding excess investor shares, will be offered 60 cents per investor share plus the five cents dividend. 

The companies' chairmen say this will provide an opportunity for non-grower investors to exit their investment in Satara at a fair price and a substantial premium relative to the last traded price for such shares, considering the current prospects for the kiwifruit post-harvest industry.

If shareholders approve, the merger will create the largest kiwifruit packing and coolstore operation in New Zealand.

“The main reasons for the merger include creating an enlarged co-operative that is owned by growers,” say the chairmen.

“The merged company will be totally focussed on grower owners' needs and in a better position to meet their expectations for quality processing, higher orchard gate returns, low packing prices and improved return on investment.  We will be creating a business of improved scale utilising the best people, assets and technology from both companies.  There will also be various cost-saving synergies from improved facility utilisation, particularly the ability to pack through the most efficient sites.”

“Growers are working hard to survive in an environment with a high New Zealand dollar and high Psa related growing costs.  We believe that by combining resources, we can reduce costs and operate more efficiently for the benefit of the growers.”

They say the merged company will also have the financial strength to quickly upscale with modern, efficient capacity, if kiwifruit volumes recover and grow in the future.


COMMENTS

Board should listen

Posted on 11-02-2013 16:01 | By Anonymous

Satara will be running out of options, the industry changes fast more so with PSA. Merge really is Satara's only option to 'survive'.

Board not listening

Posted on 05-02-2013 15:30 | By Intheknow

Satara went through this with seeka last year and the growers did not want it then... and by all indications it wont happen this time as well no matter what eastpak says. There is a building movement against this so dont hold your breath it will succeed.

half left

Posted on 04-02-2013 22:13 | By PLONKER

So only options are to merge and share the remaining spoils or sl;ug it out, the latter is not good as they will fight each other rather than planning cunningly to make the most profits.

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