Zespri Strengthens Grower Ownership With Targeted Share Offer and Buy-Back Program
MT MAUNGANUI, NEW ZEALAND - Zespri is making more moves to strengthen its kiwifruit growers’ ownership in the company, recently completing a targeted share offer and buy-back program. Closing on October 19, the offer resulted in Zespri’s acceptance of 427 applications to purchase over 12 million shares for a total of over $95 million. The company sought growers who did not previously own shares or held less than one share per tray of their production for the offer. Now that the offer is complete, the percentage of total shares in Zespri held by growers has increased to 85 percent.
“Share ownership gives producers the opportunity to benefit financially as both growers and shareholders, from fruit payments and via the corporate income stream,” Zespri Chairman Peter McBride commented. “Ownership also gives growers a greater influence over the direction of their kiwifruit marketer. The share offer and the buy-back together represent significant progress in our objective to strengthen ownership and alignment.”
McBride added that the share offer and buy-back program was a milestone in a long-term project to strengthen the industry’s foundations and addresses a problem of growing misalignment between growers who supply kiwifruit to Zespri and people who own shares in Zespri. The move follows significant changes Zespri made to its Constitution in March of this year.
According to a press release, the capital raised through the share offer will allow Zespri to fund in full a buy-back program from eligible shareholders, targeted specifically at shareholders who no longer produce kiwifruit or who hold over 1.5 shares per tray of production and over. In total, there were 257 applications for the buy-back involving nearly 9 million shares for a total of over $70 million, and the number of former growers holding Zespri shares has reduced by 30 percent.
“A significant number of New Zealand kiwifruit orchard owners do not own Zespri shares and over 18 million shares were held by people who have left the industry,” explained McBride. “Through this share offer, a good number of growers have taken up the opportunity to either become shareholders in Zespri or to increase their shareholdings in line with their entitlements.”
Zespri noted that it gave eligible shareholders an effective option to sell shares, without broker fees and that take-up of the share offer and buy-back offer by shareholders was voluntary. The share offer and buy-back were at the same price of $8.00 per share, determined by Zespri’s Board on the basis of an independent valuation.