Latest / Best of Business / Oliver Mander: NZ Shareholders Association CEO on Fonterra mulling over move to sell off consumer brands

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Oliver Mander: NZ Shareholders Association CEO on Fonterra mulling over move to sell off consumer brands · Best of Business

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  Speaker 2: Twenty five away from seven. You're on news Talk ZB tonight.
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  Speaker 2: It's great to have your company now, Denniss text us.
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  Speaker 2: And for those who are outside Auckland, you won't necessarily
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  Speaker 2: get this advert that's on the radio at the moment,
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  Speaker 2: but here if you are in the city of Sales,
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  Speaker 2: you'll hear Wayne Brown placing ads all the way through
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  Speaker 2: News Talk EDB to say I'm running for mayor of
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  Speaker 2: Auckland and you should vote for me. And he's done
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  Speaker 2: this to time it with his press conference which was today,
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  Speaker 2: which is quite a shrewd thing to do. And Dennis says, Ryan,
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  Speaker 2: do we have to listen to Wayne Brown adverts from
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  Speaker 2: now all the way until the October election? No, says Dennis.
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  Speaker 2: I would think not. I think they are slightly expensive
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  Speaker 2: things to purchase. I don't imagine he'll be doing all
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  Speaker 2: the way till October. However, I think it's a smart
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  Speaker 2: thing to do because if you'll notice this, no matter
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  Speaker 2: where you live in New Zealand, you will notice that
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  Speaker 2: the he who wins the poll wins the election. So
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  Speaker 2: what Wayne Brown is doing is getting out ahead of
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  Speaker 2: all of the competition. Who are they anyway getting out
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  Speaker 2: ahead of all the competitions, cementing his name as the
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  Speaker 2: one you vote for early on. Then the polsters come in,
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  Speaker 2: they say who you're going to vote for? People go, well,
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  Speaker 2: there's only one name in town. It's Wayne Brown, and
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  Speaker 2: boom he wins the election, which I think, and it's
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  Speaker 2: an easy prediction to make that he will. Twenty four
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  Speaker 2: away from seven. Fonterra is advancing its plans for selling
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  Speaker 2: off Anchor, Mainland and its other consumer brands. The co
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  Speaker 2: op hasn't quite decided whether to sell the brands to
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  Speaker 2: another business and a trade sale yet, or whether it'll
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  Speaker 2: list them in an IPO. But if there is an IPO,
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  Speaker 2: Fonterra has already chosen a name for the new business,
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  Speaker 2: which would be Mainland Group, and it's already lined up
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  Speaker 2: a potential CEO and CFO. Oliver Amanda is the CEO
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  Speaker 2: of the Shareholders Association. He's with me tonight, Hi, Oliver,
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  Speaker 2: got it ian? What do you reckon it'll be? Do
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  Speaker 2: you reckon trade sale or IPO?
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  Speaker 3: Well, certainly investors in New Zealand with institutional or individual
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  Speaker 3: investors would really welcome a sale by IPO onto the
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  Speaker 3: ins and X. And really given that the fact that
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  Speaker 3: the brands are so well known that is real, we're
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  Speaker 3: real shot in the arm for the inside X. But
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  Speaker 3: also because it's so well known, it would probably create
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  Speaker 3: a lot of value for Fonterra as well.
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  Speaker 2: Yeah, you mentioned the brands are very well known. They're
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  Speaker 2: also not just sold here, right, They're sold all over
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  Speaker 2: the world. So for if you're talking about investors coming
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  Speaker 2: at it from a sheer market point of view, that's
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  Speaker 2: got to be attractive.
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  Speaker 3: And yeah, absolutely right. So certainly from an investor viewpoint
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  Speaker 3: is the fact that the brands are well known here
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  Speaker 3: that recognize the strong domestic cash flows here with the
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  Speaker 3: New Zealand or at least we're assuming there are. But
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  Speaker 3: also there's that opportunity for growth from an international market
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  Speaker 3: and I think from a New Zealand Inc. Perspective, from
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  Speaker 3: a broader New Zealand perspective, that's why it's almost really
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  Speaker 3: important that actually that this does become IPO on the
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  Speaker 3: inside ex by New Zealand investors, because then you've got
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  Speaker 3: Fonterra strategy playing out and I've talked about that being before,
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  Speaker 3: about being very manufacturing focused, wholesale or supply chain business,
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  Speaker 3: and then you get that real long term value that's
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  Speaker 3: that's brought about by investment in brands.
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  Speaker 2: I suppose you would say this being when the shareholders association, I.
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  Speaker 3: Mean, you could argue that, but I think this also
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  Speaker 3: comes down to where the best value is for volunteer
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  Speaker 3: and look, I think individual investors and institutional New Zealand
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  Speaker 3: based investors would would probably pay a premium to get
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  Speaker 3: hold of a really high performing asset compared to what
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  Speaker 3: a private equity or a trade trade sale for the
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  Speaker 3: sorts of returns that they'd be looking.
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  Speaker 2: For and which it could also mean that it goes
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  Speaker 2: offshore as well, right the ownership, which would not great
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  Speaker 2: for us.
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  Speaker 3: And that's absolutely right. So from a New Zealand think perspective,
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  Speaker 3: as I said, I mean, this is really about trying
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  Speaker 3: to preserve as much value as we can in New Zealand.
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  Speaker 3: So Fonterra strategy is all about trying to really sweat
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  Speaker 3: that manufacturing supply chain process. That's great for them, but
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  Speaker 3: then from a New Zealand perspective, let's try to preserve
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  Speaker 3: that long term value in the brands and Mainland group
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  Speaker 3: as it's proposed. Actually that would do that, that would
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  Speaker 3: preserve value for investors and create longer term value for
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  Speaker 3: New Zealand inc.
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  Speaker 2: Oliver, What do we know about the potential CEO and
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  Speaker 2: CFO and is it unusual before they've even decided how
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  Speaker 2: they'll sell it or whether they'll do an IPO to
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  Speaker 2: sort of sound some out.
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  Speaker 3: I don't think it's particularly unusual. I mean, what you've
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  Speaker 3: got here is a leadership or the emergence of a
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  Speaker 3: leadership team. If you're trying to promote an IPO into
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  Speaker 3: the market, Actually getting getting that leadershi team introduced to
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  Speaker 3: potential investors is actually a really good idea. And certain
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  Speaker 3: that the blend that you have here, you know, on
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  Speaker 3: a long term Volnteier employee, someone who is someone who
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  Speaker 3: the business has grown themselves into having the right capability
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  Speaker 3: that's needed for that business, and then also bringing in
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  Speaker 3: the right blend of external experience and that can provide
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  Speaker 3: a fresh perspective. It's to propose, see you having Paul
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  Speaker 3: Victor So No, look, I don't think it's particularly unusual.
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  Speaker 3: I think it's good for the market. It's good for
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  Speaker 3: the company to go out and introduce the people that
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  Speaker 3: become really important to investors as this business comes on
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  Speaker 3: to the Stock Exchange.
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  Speaker 2: Good stuff, Oliver, thank you very much for that. Great
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  Speaker 2: to have you on the show. Oliver, Amanda the New
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  Speaker 2: Zealand Shaholders Association's CEO.
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