New bidder ups stakes in NZFSU takeover offer

Another bidder has launched a takeover offer for NZ Farming Systems Uruguay (NZFSU) and has raised the stakes.

Uruguay-based Union Agriculture Group (UAG) has offered 60c a share – 5c more than Singapore-based Olam International.

Olam, which previously had a stake of 18.45% in NZFSU, has a commitment from PGG Wrightson that it will accept the offer for its 11.52% NZFSU holding provided Olam acquires at least 51% of the farm development company.

UAG has notified the stock exchange it plans to make an all cash offer of 60c for all of the issued and outstanding shares in NZ Farming Systems Uruguay.

Its offer represents a 46% premium to NZFSU's trading price on July 17 of 41c, before the offer from Olam.

UAG chairman Juan Sartori said in a statement today he believed his company had produced a compelling offer.

“Our objective is to acquire a controlling stake in NZFSU and we are content to achieve ownership of 50.1% and have [the company] listed on the NZX,” he said.

“We believe combing UAG’s management expertise and local knowledge in Uruguay with NZFSU’s expertise and experience with dairy farming will create significant opportunities for growth.

“NZFSU could become one of the most successful dairy operations in the world.”

UAG is privately owned and was formed to buy and develop agricultural land in Uruguay.

It owns more than 50,000 of agricultural land including dairy, sheep and beef farms, fruit orchards and pastoral farms.

NZFSU’s board of directors has been advising shareholders to delay accepting Olam’s offer and wait for further advice.

On Friday, it was announced the company had been granted tax benefits worth $US20-25 million under Uruguayan tax law.

The benefits would be available to offset the company’s tax liability once it becomes profitable, expected during the 2011/12 financial year.