A proposed kiwifruit industry merger deal between fruit-packing companies Eastpack and Satara has narrowly failed to attain the required support.
Both companies’ boards had asked for investor and grower backing for the merger. EastPack shareholders were 97 per cent in favour.
Only 74.8 per cent of growers who supply Satara expressed support for the merger, falling just 0.2 per cent shy of the 75 per cent required.
Hedrick Pieters, Satara’s chairman, expressed disappointment at the merger being blocked but said both companies planned to access the results before deciding whether or not to ask their shareholders for another vote on a merger.
The industry is currently struggling with falling supply caused by the Psa vine disease and a high exchange rate, issues that Pieters touched on in an open letter to shareholders recently published in the Bay of Plenty Times.
“Our combined company will be in a much stronger position to deal with the challenges of Psa and the exchange rate that we would be if we stayed separate,” the letter read.
The merger proposal called for Satara to delist from the New Zealand Exchange (NZX), make payments to non-grower investors, and exchange Satara shares for Eastpack shares. The merged company was to become an entirely Eastpack-owned subsidiary which would pack an anticipated 27m trays of kiwifruit in 2013, approximately 28 per cent of New Zealand’s total crop.
Eastpack and Satara first considered merging in 2010. However, this was halted as a result of uncertainty surrounding the Psa outbreak. In 2011, a merger proposal with another Te Puke-based kiwifrit operator, Seeka, was rejected by Satara shareholders.
