Oz IPO opens new fundraising route for co-ops

Author: Ashley Lee | Published: 9 Jul 2015

The IPO of MG Unit Trust, a wholly-owned subsidiary of Australian dairy co-operative Murray Goulburn, has expanded fundraising options for agribusinesses.

MG Unit Trust, which listed on the Australian Securities Exchange (ASX) on July 3, allows investors to receive returns from Murray Goulburn’s dairy business without breaking its co-operative model; it is owned by its suppliers, or dairy farmers.

It follows the 2012 New Zealand IPO of the Fonterra Shareholders’ Unit, the listing of that country’s largest dairy co-operative. Fonterra was the first to use a structure in which outside investors could receive economic benefits but not become shareholders. 

The MG Unit Trust IPO has improved upon that structure. A key point of the transaction involved the alignment of interests between investors coming in through the trust and the farmers in Murray Goulburn, said Tim McEwen, partner at Herbert Smith Freehills in Melbourne, who acted for the...