By Boyd Champness
THE future of Australias 750,000-bale wool stockpile remains uncertain following growers rejection of A$560 million (211m) offer.
WoolStock Australia – a grower-owned company with almost 70,000 shareholders – rejected the offer from the Australian Wool Group on the advice of adviser Ord Minnett.
Under the offer, woolgrowers would exchange their interest in WoolStock Australia for a complex mix of cash, debt and equity securities in the Australian Wool Group.
Woolstock Australia board chairman Donald McGauchie said the offer – which resulted from meetings with growers around Australia since January – would have exposed growers to greater risk and was unlikely to match forecast returns under the current business strategy.
Woolstock Australia has reduced the stockpile from over one million bales to 750,000 since it was commissioned with reducing the stockpile and or finding a buyer in the middle of last year.
“The AWG offer proposes that Woolstock shareholders forgo their cash returns from selling the stockpile and instead accept debt and shares in an unproven processing business operating in an extremely competitive environment,” Mr McGauchie said in a statement.
Mr McGauchie said “sales to date have exceeded expectations in a strengthening wool market” and Woolstock had not received any offers relating to the stockpile that the directors of the board considered attractive enough to warrant recommendation to shareholders.
However, those farmers who supported AWGs offer – with the help of AWG itself – are now pushing to sack the Woolstock board.
AWG wants to organise a no-confidence vote in the board at meetings around the country. If successful, the board would be replaced with another that would be asked to submit the takeover recommendation to a vote.