Perpetual buys Fonterra units

Fund manager takes advantage of share price plunge on contamination scare.

ASX-listed fund manager Perpetual (PPT) has used Fonterra Cooperative Group's (FSF) food scare to trawl for cheap units in the dairy exporter's listed fund.

Funds managed by Perpetual bought about 1.26 million units, or 1.17%, of Fonterra Shareholders' Fund for some $7.32 million on August 5, when the price plunged in the first trading day after the dairy company said some of its product may have been tainted by bacteria that can cause botulism.

The average purchase price was just under $5.83 per unit, and takes Perpetual's stake in the fund to almost 10%, according to a substantial shareholder notice filed with the New Zealand and Australian stock exchanges.

The Fonterra fund's price has recovered since the dive, closing on the ASX yesterday at $6.20, meaning Perpetual's bottom-trawling has already achieved an unrealised gain of some $470,000, or about 6.4%.

Fonterra chief executive Theo Spierings told media on Wednesday all potentially contaminated whey protein product has been accounted for, and he was satisfied the food scare had stabilised.

Perpetual has some $25.3 billion under management as at June 30, according to a stock exchange filing last month. Its shares fell 3.6% to $38.78 on the ASX yesterday, having gained about 12% this year.

Want access to our latest research and new buy ideas?

Start a free 15 day trial and gain access to our research, recommendations and market-beating model portfolios.

Sign up for free

Related Articles