A2 Milk Co has bought an 8.2% stake in Synlait Milk at a small premium, building on an existing supply agreement between the milk marketer and dairy processor. Sydney-headquartered a2 bought 14.6 million shares at $3.275 apiece from Dutch dairy processor Royal FrieslandCampina, a 5.6% premium to Thursday’s closing price of $3.10 and a 3% premium to the one-month volume weighted average price. A2 and Synlait signed a supply agreement in 2012 to support the a2’s plans to launch infant formula sales into China, and inked a new deal last August providing for increased scale if market demand warranted it. The milk marketing firm said the Synlait investment provided certainty for its medium-term plans, with the supply agreement still at the heart of their relationship, and that it had no plans to lift its stake. A2 shares were trading at $2.40 yesterday and have gained 31% over the past 12 months.

Source: Otago Daily Times March 03, 2017 17:04 UTC