Fonterra shareholder fund pricing uncertainty leaves Morningstar cold

Tue, 20 Nov 2012

By Paul McBeth Nov. 20 (BusinessDesk) - Investors should steer of the Fonterra Shareholders' Fund, which seeks to raise up to $525 million to reduce the dairy cooperative's redemption risk, until the units start trading, according to Morningstar Research. However, the units have too many pricing uncertainties in the bookbuild phase. The research firm gives a 'do not subscribe' recommendation for the fund's initial public offering, saying Fonterra Cooperative Group lacks pricing power over its dairy commodities, generates low returns compare...

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