Factors behind the Fonterra Shareholders' Rejection of the Board's Capital Restructuring Plan of 2007

The New Zealand dairy cooperative Fonterra is one of the largest in the world. In 2007, its Board presented a capital restructuring proposal with the aim of reducing the equity redemption risk, solving members’ portfolio problems, and acquiring capital for the cooperative. The proposal indicated that external owners would be allowed, but that members would own most of the stock. The shareholders rejected the proposal. This analysis of why the proposal failed shows that two specific characteristics of Fonterra were primarily responsible: The shareholders considered the Fair Value Share to be instrumental in securing full member control and the Shareholders’ Council effectively channeled members’ opinions.


Issue Date:
2015
Publication Type:
Journal Article
PURL Identifier:
http://purl.umn.edu/244026
Published in:
Journal of Cooperatives, Volume 30
Page range:
1-27
Total Pages:
27




 Record created 2017-04-01, last modified 2017-08-22

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