Comvita [NZX: CVT], which makes health-care products and supplements based on honey, has lifted the cash component of its takeover offer for New Zealand Honey, the Timaru-based honey produce owned by the New Zealand Honey Producers Cooperative that operates the Hollands Honey, 3 Bees and Sweet Meadow brands.
The purchase price will now comprise $10.3 million in cash and $2 million Comvita shares issued at $3.50 apiece, Comvita said in a statement. The deal had originally been for $7.3 million of cash and $5 million of shares. The NZX-listed company last traded at $3.80.
The acquisition is now expected to be completed in July 1, about two weeks later than had been planned, it said. Te Puke-based Comvita has a strategy of increasing its own supplies of raw honey to protect production in times of shortages. Buying NZ Honey would give it about 45 percent of the nation's honey supply, which is about 12,000 tonnes a year.
If the 70 beekeeper shareholders accept the offer, Comvita will acquire all assets of NZ Honey, including land and honey processing assets in Timaru, the honey inventory at settlement and a long-term honey supply agreement with the co-op.
Last month, Comvita posted annual net profit of $7.5 million after reporting a first-half loss of $790,000 last November as price competition in Australia and the UK held back sales. The Hong Kong market was affected by greater scrutiny on New Zealand products in the aftermath of the Fonterra Cooperative Group's botulism contamination false alarm, it has said.