Last push to get farmers over the line on Irish takeover of Alliance Group
Friday, 17 October 2025
Alliance Group farmer-shareholders are concerned about losing control over the co-operative under a proposed buyout by Dawn Meats, even as the Irish business adds a $40 million sweetener to the deal.
Dawn Meats is planning to buy 65% of the co-operative for $250m. As announced in August, shareholders have been told the money will mostly go towards paying off debt - Alliance’s $188m debt must be repaid in full, in cash, by December 19 – with no extensions.
On top of that, the Irish-owned company is now confirming a $20m to $25m capital investment in Alliance, and another $40m will go back to farmer-shareholders, if they meet livestock supply targets.
Southland-based Alliance had spent the past month holding 22 meetings around the country in a roadshow involving about 1000 shareholders, chairperson Mark Wynne said.
Shareholder voting was under way with around 55-60% of votes cast so far, ahead of the October 20 special general meeting in Invercargill. For the proposal to pass, more than half of all issued shares had to vote, and at least 75% of those had to be in favour of the deal.
“Farmers don’t want to lose control,” Wynne told The Post at the end of the roadshow. “But the simple truth is we have a weak balance sheet that needs to be addressed, and our shareholders have told us clearly they don’t have the appetite or capacity to put more capital into Alliance.”
He said the only other option for farmers was to inject capital directly into the business, something they were unwilling or unable to do.
“We tried last year and again in April this year, when livestock prices were higher, but the result was the same – farmers either can’t or won’t put more money into Alliance,” Wynne said. “Without that capital, we can’t refinance, and without refinancing, we can’t continue to operate in our current structure.”
Losing control
Wynne said a common concern he’d heard was about any new direction of the business.
But he was certain the agreement underpinning the new ownership structure would ensure it operated as a “a 50-50 joint venture”. Alliance’s farmer-shareholders, who would control the non-Dawn Meats-owned 35% of the group, would be represented by two board members - Wynne and current Alliance supplier representative Jared Collie.
Meanwhile, Dawn Meats would have three board members - chairperson Thomas Moran, chief executive Niall Browne and group financial director Sean Breen.
The agreement currently had 20 matters that needed approval from both sides of the board table “before any major changes can happen”, Wynne said.
It meant both Alliance and Dawn Meats would have to agree on matters like the annual budget, business plan, asset management and related party transactions.
Alternative options explored
Alliance’s board began seeking external investors after an internal capital raise failed last year. It contacted 50 potential investors globally before narrowing it down to Dawn Meats.
Before the roadshow began, a group of Southland farmers published an open letter proposing their own capital raise. Signatories included Andrew Morrison, the former chair of Beef + Lamb.
The plan required all shareholders to contribute $5 a share in the first year and $2 a share in each of the following two years.
Wynne said the plan was not commercially viable.
“They assumed the banks would extend our debt by three years, which we don’t believe they will,” he told The Post.
“We know from surveys and meetings that shareholder appetite for that is very, very low, and the banks won’t accept a plan that leaves them holding the risk.”
The deal would also see Alliance listed on the Unlisted Securities Exchange (USX) with “$1” shares converted to tradeable ordinary shares worth $1.26 per share, which Wynne said gave farmers a chance to “get their cash” if they wished to sell up.
“That gives farmers freedom to trade among themselves and get their cash immediately, rather than waiting five years for redemption,” Wynne said.
Avoiding an ‘uncertain future’
If the proposal failed, Wynne said the consequences would be “pretty dark”. Northington Partners report said the group would have to sell assets, close sites, try to raise more capital, or go into insolvency if shareholders voted against the cash injection from Dawn Meats.
Wynne said, “We’d have to go straight back into negotiations with our banking syndicate, and I’m very sure they’ll say the debt repayment is still due.
“They might not renew our working capital facility for next year. The board might not be in control at that point. We could be looking at a mortgagee sale or receivership.
“The alternative is not another farmer-led recapitalisation or a better offer,” he said. “The alternative is a very uncertain future, and potentially no Alliance at all.”
Despite the high stakes, Wynne said the mood on the road was largely constructive and he was “hoping” for a positive outcome.
“Our job is to inform shareholders of the proposal, its benefits and risks, and what happens if they say no,” he said. “At the end of the day, it’s their company, their choice, and their vote. But our recommendation is clear, please vote ‘yes’.”