Fonterra directors expected the share and unit prices to fall

Fonterra director Bruce Hassall said there was no alternative. (Image: PwC)

Mon, 01 Nov 2021

Fonterra's directors were aware their decision to cap the Fonterra Shareholders' Fund (FSF) was likely to lead to both the fund's units and Fonterra shares falling.It's a matter of record now that more than $2 billion of farmers' wealth was destroyed by that announcement and that, although the FSF units also fell, the shares are trading at a 15% to 25% discount to the units.Given the pedigrees of some of Fonterra's directors, it seemed unlikely to me that they would have failed to anticipate the sharp reaction to the May...

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