A listed meat processor, Affco Holdings is recommending small shareholders to reject South Island food producer Talleys Group offer of 37 cents-a-share takeover.

Affco has made this announcement because according to them, offer price did not reveal the true value of the Company.

Talleys came up with this offer after Toocooya Nominees decided to sell its 23.5% stake to them. Because of the deal, Talley’s total shareholding in Affco reached 76.3%.

Affco has commissioned an independent committee, which has analyzed the offer and said in the statement that “while the offer is a significant vote of confidence in the Company's strategic direction, it did not reflect the considerable investment in our plants over the last six years”.

Previously, the committee had set up an equity valuation range for Affco between 34 cents to 44 cents per share. They said that the independent directors should not sell their shares into the offer.

Affco is the fourth largest meat processor and exporter in New Zealand, which was set up in 1904. Presently, two plants in the South Island and nine plants in the North Island are being operated by Affco.

Shares of Affco were unchanged at 37 cents. Since November 2009, the stock has been traded between the range of 36 cents and 40 cents.