John Wylie’s Tanarra Capital was knocked out of Lion’s sale process on Friday morning. Not that he considered that the end of it. Tanarra increased its bid by $30 million on Friday afternoon, to no avail. Then at 6:51pm, The Sydney Morning Herald published an article entitled “Dairy farmers back Tanarra bid for Lion dairy business”, quoting from a letter written to Tanarra by Mark Kebbell, the head of the co-op that supplies Lion’s milk. All very well but, again, too little, too late.
Kebbell, spouting one Tanarra talking point, raised the spectre of competition barriers to Bega’s (or indeed Saputo’s) purchase of LDD. Yet the Australian Competition and Consumer Commission had already greenlit Bega’s bid.
It does seem pretty wild to us that Kebbell’s Dairy Farmers Milk Co-op threw its lot in with Wylie given the former Lazard chief’s profound legacy in this sector.
He understandably loathes being reminded, but Wylie was “a formidable pair” with Gary Helou in the catastrophic float of the Murray Goulburn co-operative in 2015.
Their structure, Gary the Great promised, would mystically decouple MG from the global commodities cycle and guarantee a “sustainable” $6 per kilo price for its farmers and a 7.5 per cent coupon for its unitholders. It also allowed Helou to pay $36 million of the $500 million raised directly to his advisers, including Wylie’s then firm, Lazard.
By April 2016, prices at the farm gate and on the ASX had collapsed, Helou was gone, and the company was selling the furniture. Canada’s Saputo bought Murray Goulburn’s carcass in May 2018.
Of course, in 2014, it wasn’t Wylie who Coles CEO John Durkan (AKA The Reptile) bent over the fence for a decade of $1 per litre private label milk. Only Gary the Great can take credit for that fatally value-destructive move. Nor would we ever suggest Wylie had anything to do with Helou’s subsequent dishonesty with Murray Goulburn investors.
Only two weeks ago, the Federal Court disqualified Helou from managing corporations for three years over contraventions of his continuous disclosure obligations in March and April of 2016. Better late than never from the Australian Securities and Investments Commission.
In February 2017, Helou was insisting before a Senate committee that “We didn’t mislead, I didn’t mislead”. In December 2018, Helou was fined $200,000 for false and misleading conduct in a Federal Court action brought by the Australian Competition and Consumer Commission.
Throughout 2015 and 2016, including days before the devastating downgrade that cost Helou his job, this column frequently singled out his promises to Murray Goulburn farmers and investors as a complete fantasy. The company even issued a statement in February 2015 claiming “the Rear Window columns have repeatedly been based on misinformation”.
In the fullness of time, the justice system has proved which of us was peddling misinformation.
The failed Lion bid aside, Tanarra’s unique genre of “friendly activism” has endured a mixed year given its comprehensive outmanoeuvring by Ryan Stokes at Boral. But Wylie’s no fool – expect his next one to be a winner.
