Affco shareholders have voted overwhelmingly to formalise its business deal with subsidiary Dairy Trust, a new dairy processing company, and its takeover bid for a cheese manufacturer.

At a special meeting of shareholders in Auckland today, 99.9% of shareholders supported Dairy Trust’s takeover bid for Waharoa-based Open Country Cheese (OCC).

They also endorsed an agreement between Affco and Dairy Trust on the use of the meat company’s effluent discharge and water supply systems by four new milk processing plants being set up.

Affco has sold three unused meat plants and equipment worth $26 million to Dairy Trust in return for 26 million new shares in Dairy Trust valued at $1 each.

The milk processing plants are being set up on land adjoining Affco’s effluent discharge and water supply systems.

Affco chairman Sam Lewis says the vote is “pretty convincing”.

He says the special meeting to seek shareholder approval was needed to formalise related party matters as Affco’s majority shareholder - Talleys - was involved with all three parties.

Talleys is spearheading the Dairy Trust venture and holds a 70% stake through Affco. The South Island-based company also owns a 30% stake in OCC.

Talleys director Andrew Talley says the shareholder vote “is a great decision for everyone concerned”.

He says the offer process for OCC will continue.

OCC’s independent directors are expected to send Dairy Trust’s takeover offer to all its shareholders on Monday.

It’s three independent directors Duncan Milne, Wyatt Creech and Bruce Clothier have indicated that the Dairy Trust offer is inadequate because it lacks cash payment options.

For each of the OCC shares, valued at $2.23, shareholders will receive 1.68 Dairy Trust shares at $1.34 per share.

According to Talley, Dairy Trust is “very happy” with the terms of the offer.