NZ Farming Systems jumps on Olam takeover bid

(BusinessDesk) Singaporean commodity group Olam International has renewed its attempt to take full control of NZ Farming Systems Uruguay with a slightly sweeter offer than what it put on the table last year to secure 86% of the South American dairy farming operation.

Olam is offering 75 cents a share, or $25.8 million, to mop up the remaining 14% it does not own, a month after the South American dairy farmer missed annual earnings guidance with a full-year loss of $US7.6 million.

Farming Systems shares (NZX: NZS) jumped four cents, to 74 cents, this morning, on a single trade of 3000 shares. The stock started the year at 65 cents. 

Olam offered shareholders 70 cents a share last year when it successfully took control of the company.

"Olam believes this is a full and fair price for NZFSU shares, and accordingly the offer price will not be increased," the company says. If it gets to the 90% target to enforce compulsory acquisition of the remaining shares it plans to delist the company.

The Singaporean full takeover bid was blocked last year by a group of minority investors who were holding out for a bigger payday. They claimed the net asset value was closer to 85 cents a share, which was justified on increasing land prices in Uruguay, high milk prices and the management of Farming Systems.

That was at odds with the independent adviser's report by Grant Samuel, which found the 70 cents a share offer was above the 60 cents to 69 cents valuation range.

Farming Systems net tangible assets were 78.9 cents per share, according to NZX data.

Olam says it expects to dispatch an offer document within 14 to 30 days of today's statement.

In August, Farming Systems says it is considering a pro rata rights issue to raise as much as $US135 million, at about 69 cents per share, which would be supported by Olam.

That funding is needed to meet its capital works programme and operating cash requirements.

This article is tagged with the following keywords. Find out more about My Tags

2 Comments & Questions

Commenter icon key: Subscriber Verified

norgate and his mates really stuffed up big time with this venture.
sadly another kiwi company going elsewhere

Reply
Share

Spot on.

Reply
Share

Post New comment or question

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.

NZ Market Snapshot

Forex

Sym Price Change
USD 0.7845 0.0017 0.22%
AUD 0.8994 0.0002 0.02%
EUR 0.6203 0.0010 0.16%
GBP 0.4929 0.0003 0.06%
HKD 6.0847 0.0131 0.22%
JPY 84.0120 0.0180 0.02%

Commods

Commodity Price Change Time
Gold Index 1233.8 -1.760 2014-10-14T00:
Oil Brent 85.4 -4.470 2014-10-14T00:
Oil Nymex 81.2 -4.530 2014-10-14T00:
Silver Index 17.4 0.035 2014-10-14T00:

Indices

Symbol Open High Last %
NZX 50 5145.9 5168.7 5145.9 0.33%
NASDAQ 4246.2 4281.3 4213.6 0.32%
DAX 8765.4 8854.4 8812.4 0.15%
DJI 16321.9 16463.7 16321.1 -0.04%
FTSE 6366.2 6403.4 6366.2 0.42%
HKSE 23087.5 23230.3 23048.0 0.67%
NI225 15009.8 15044.3 14936.5 -0.13%