Murray Goulburn co-operative’s emergency boss, Ari Mervis, will leave the company as he hands over the reins to new owners, Canada’s Saputo Inc at the end of this month.
The managing director and former beer industry chief was hired just over a year ago to revive MG’s prospects after its farmgate milk price, share price and financial outlook all collapsed in 2016, triggering a dairy industry crisis in southern Australia.
Saputo’s buy-out of the troubled farmer-owned dairy processor has just received Foreign Investment Review Board (FIRB) consent, two weeks after shareholders accepted a $1.3 billion deal negotiated by Mr Mervis and his crisis management team.
Chief financial officer, David Mallinson, who also held the fort as interim chief executive for about six months prior to Mr Mervis arriving, and company secretary, Amy Alston, will also leave their jobs when the sale goes through.
Saputo received confirmation of the federal government regulator’s approval late Wednesday, clearing the way for MG’s factory and related assets to transfer on May 1.
All other conditions required as part of the asset sale, including the Australian Competition and Consumer Commission’s tick of approval – albeit with some stringent conditions – have been satisfied.
Ari Mervis is among the most talented executives I have worked with
The 68-year-old co-operative expects to complete the deal as planned and pay an initial distribution of 80 cents a share to shareholders and unitholders in the MG Trust by May 15.
MG chairman, John Spark, also a new appointment after a big boardroom shakeup 15 months ago, thanked Mr Mervis for his “significant contribution”.
“Ari is among the most talented executives I have worked with during my career and he worked tirelessly to resolve the difficulties faced by MG,” Mr Spark said.
The right decision
“The board remains unanimous the Saputo transaction provides the best available outcome for our suppliers and investors and this view is supported by the thorough work undertaken by Ari and his management team during the strategic review.”
Mr Spark noted David Mallinson had also made a sustained contribution to the company’s survival, and thanked him for managing as interim CEO “during very challenging circumstances”.
Mr Mervis joined MG after leaving his previous job as managing director of beer giant Carlton and United Breweries when the business’ parent company, SABMiller merged into the Anheuser-Busch goup in late 2016.
Share activity increased
Despite being widely anticipated, the sale of the debt-heavy business and MG’s low unit price on the Australian Securities Exchange have not deterred recent share trading interest in the company.
MG Unit Trust shares have been slowly climbing in value for the past nine months, rising more notably since early March.
Last June they were worth 63 cents each, but climbed to 83c/share by March 1 and to just over 94c by this week.
While still a far cry from their $2.20 listing price in July 2015 and their peak at $2.70 in January 2016, MG trust share activity of late included significant shareholding purchases by several financial groups.
Sydney-based managed investment trust, Nordlys Investments bought 10.4m shares on April 17, giving it a 5.01 per cent stake in the business, while investment bank Morgan Stanley and the Mitsubishi UFJ Financial Group both reported increasing their holdings to 6.02pc on April 9.
Melbourne investor Robert Peterson’s Ayersland Limited paid more than $8m for just over 10m shares between September and December last year.
As part of the big MG asset takeover, Saputo has agreed to re-sell the Koroit dairy factory near its Warrnambool Cheese and Butter plant at Allansford to maintain farmgate milk price competition in south western Victoria.
The ACCC said Saputo would otherwise have dominated the regional milk market if it kept the plant.
Several companies have already expressed interest in the Koroit plant.