By Tina Morrison
A2 Milk Company's largest shareholder, Freedom Foods Group, has reduced its stake in the milk marketing company after its punt at a takeover was rejected.
Sydney-based Freedom Foods sold 42.5 million shares in the milk marketing company for AU$28 million ($30M) for investment elsewhere, reducing its stake to 10.4 percent, it said in a statement.
Freedom Foods, controlled by the Perich family who are major suppliers of A2 milk, intends to maintain a strategic stake in the company, and continue providing it with production capabilities and milk supply, it said.
Freedom Foods previously held a 17.9 percent stake in A2, according to NZX data.
The shares were sold in an on-market trade at 73 cents apiece. A2 shares fell 2.5 percent 77 cents, and have gained 36 percent so far this year.
ASX-listed Freedom Foods announced the sale at the same time as it detailed plans for a AU$65M equity raising to enable it to buy oat-based cereal and snack manufacturer Popina, fund the construction of a new UHT processing facility, and provide it with additional balance sheet flexibility for future growth opportunities.
In June, Freedom Foods and Texas-based food and beverage company Dean Foods formed an investment group that was contemplating a takeover offer for the milk marketer, which A2 ultimately rejected a month later, saying it wasn't compelling.
A2 Milk is pleased Freedom Foods plans to retain a strategic shareholding, chairman David Hearn said in a statement on Wednesday.
"The board and management look forward to working together with FFG and all stakeholders to continue to build the A2 business and to create increasing value for all shareholders in the future," he said.