Rural Equities, the farming group controlled by the Cushing family, has lifted its stake in Tandou after taking up its entitlement in the ASX-listed agribusiness's three-for-eight rights offer.
Entities associated with Rural Equities now hold 21 percent, up from the 17.7 percent owned in August. Tandou's offer at 47 Australian cents a share closed on April 28. Shareholders subscribed for about A$13.5 million of the A$25.2 million sought. Underwriter Petra Capital made up the shortfall of about A$11.7 million, placing the stock with institutions and professional investors.
Tandou shares last traded at 46.5 Australian cents on the ASX and have gained about 12 percent in the past year. They are rated a 'strong buy' based on two analysts polled by Reuters.
Rural Equities executive chairman David Cushing declined to comment on the enlarged stake other than to say his firm was a long-term shareholder of Tandou.
The Australian company will use the funds raised to pay down debt used to buy 34,585 megalitres of water entitlements and the Murrumbidgee, New South Wales property known as South Farm for a total of about A$33 million, which was completed in January.
Tandou focuses on large scale production of irrigated cereal crops and cotton, the pastoral production of sheep meat and providing agribusiness services to its customers, according to its website.
The Australian company was the subject of an unsuccessful takeover bid by Guinness Peat Group in 2009 and 2010. GPG sold its stake earlier this year for A$12.8 million, or 36 Australian cents apiece.