FIRST MILK is poised to make a major step into processing by taking a 15% stake in Robert Wiseman Dairies.
Few details have emerged, but the Scottish milk processor, which is valued at £176m, said the purchase would probably be based on an offer to all its shareholders from First Milk to buy 15% of their shares for £2.50 each – a 10% premium on the closing price on Friday, Oct 1.
Brothers Alan and Robert Wiseman, chairman and managing director respectively, own about 55% of the stock, but it is not clear how much of their stake they will sell.
One analyst calculated that if everybody took up the offer the brothers would be left with 46% of the firm, but if they were forced to underwrite the entire deal they would retain 39%.
Wiseman‘s management will remain unchanged.
The deal will cost First Milk – which already supplies 40% of Wiseman‘s milk – almost £30m, but the dairy co-op would not discuss its funding sources.
Unlike other major co-op members, First Milk‘s 4000 farmers do not pay a levy at present.
But a spokesman for the co-op refused to rule this out as a possibility and members contacted by FARMERS WEEKLY recognised investing in processing would require some contribution from themselves.
First Milk has announced that it will be holding its milk price for October deliveries.